Taxing Times For UK Performers

Forthcoming changes to the tax system could have serious financial implications for people working in film, TV, radio, theatre and commercial production. Tax and accountancy experts ClearSky Entertainment explain.

Under the current tax system actors, musicians, singers and other performers are treated as self-employed for taxation purposes, but employed for National Insurance (NI) purposes.

However, if proposed reforms go ahead, from 6th April 2014 every UK-based performer will be classed purely as self-employed.

The government’s move to repeal the so-called dual status follows a consultation by HM Revenue & Customs, in which an overwhelming majority (99.1%) of the 11,814 respondents supported simplification of the system.

A boost for British production
A significant factor in the drive for reform is the fact that, under current legislation, production companies engaging with UK talent are required to pay employer’s National Insurance contributions (NICs) at a rate of 13.8%.

By eliminating this financial burden, the proposed reforms are designed to ensure that the UK remains a competitive location for production.

The risk to performers
There is, however, a danger for individuals working in the industry. The dual status may be confusing, but it does mean that low-income performers are currently eligible to claim benefits such as Jobseeker’s Allowance (JSA) – offering vital protection in those difficult periods between roles.

If implemented, the changes will leave performers reliant on the new overarching Universal Credit benefit. This assumes self-employed earners generate a minimum annual income of £11,000, known as ‘minimum floor income’, which is then deducted from any claim for Universal Credit.

In a recent article with The Stage, ClearSky senior accountant Aaron Malins explained how “some entertainers don’t have that kind of income”, with the upcoming reforms reducing their Universal Credit entitlement.

Yet it isn’t just low-earners who are at risk. Performers in a more secure financial situation, such as those who have accumulated considerable savings, also stand to lose out by being made to rely on savings.

Professional advice and support
With the new system due to come into force in a matter of months, forward-thinking performers are seeking expert guidance on how they will be affected.

Call ClearSky Entertainment today on 0800 014 9596 or email for expert advice.