Celeb city

My clients have opened a nightclub and to raise its profile they intend to pay a five-figure sum to a celebrity who is on a visit to the UK from abroad and who has agreed to attend their opening night. Should tax be deducted from this payment? Also is there a tax implication if they pay for her accommodation subsistence and transport costs during the visit to their locality?

Can readers advise on this and if tax is payable on the mechanics of dealing with such payments?

Query 17 282 — Hollywood.

Reply by Kathy Johnson Tenon Limited:

A UK entity has a legal obligation to: withhold tax at the basic rate on gross payments (including fees per diems etc) made to a non-resident individual; gross up the value of any expenses paid on behalf of the entertainer at the basic rate; and...