Self-employed entertainers’ NI under review

The National Insurance (NI) treatment of self-employed entertainers is under review by HMRC, who claim to be seeking an arrangement that will give individuals on lower income access to a benefits package financially comparable to the contributions-based jobseeker’s allowance.

The Social Security (Categorisation of Earners) Regulations 1978 have applied since 1998 to self-employed entertainers, whose earnings are deemed to be those of an employed earner under certain circumstances and subject to class 1 NI. A new consultation document puts forward four options including the Revenue's favoured solution of repealing the current categorisation regulations and returning affected taxpayers to classes 2 and 4 NI.

The reality of how entertainers are engaged and paid has recently caused problems in terms of the practical operation of class 1 NI where the social security rules apply, according to HMRC. The regulations often fail to meet their original policy intention to protect the access of entertainers to contributions-based jobseeker’s allowance and place an administrative burden on those engaging the entertainer in determining whether the regulations should be applied and by whom.

Comments on the condoc should be emailed to the taxman no later than 6 August.

Issue: 4403 / Categories: News , Employees , Income Tax