.png)
.png)
HMRC have confirmed their position following the Upper Tribunal’s decision in the ITV Services Ltd case, which concerned the application of the Social Security (Categorisation of Earners) Regulations 1978 to payments made to actors engaged by ITV under specific contract types.
The tribunal upheld the decision of the First-tier Tribunal that actors’ contracts provided for remuneration by way of salary and were therefore liable for Class 1 National Insurance (NI).
‘Actors’ and ‘entertainers’ were referred to specifically in Revenue & Customs Brief 10/11; the Revenue has issued 19/12 to clarify that liability for Class 1 NI arises in relation to all types of entertainers, including musicians, engaged under contracts in which remuneration includes an element of salary, as defined in the regulations.
The department says it has no plans to undertake concerted compliance activity in the media sector in respect of entertainers and the regulations as a result of the ITV Services decision, but the law in terms of the regulations as described by the Upper Tribunal will be applied when tax officials undertake an investigation into an entertainer or media company.
The extent to which taxman will seek to apply the decision retrospectively will be determined by different factors. Where HMRC have issued a written opinion stating Class 1 NI is not due in respect of a particular contract, no retrospective recovery of the money that would have been due prior to 6 April 2011 will take place.
In circumstances in which the Revenue has agreed in writing that NI is not due on a contract, and the engager uses the same contract to engage other entertainers in the same production, the department will not seek arrears due before 6 April 2011.
HMRC reserve the right to seek retrospective recovery of any NI arrears where no written opinion is in place.
