.png)
.png)
Entertainers are to set to be designated as self-employed for National Insurance (NI) purposes, following a decision by the government to repeal the current rules.
The change means actors, singers, musicians, and other performers will pay class 2 and class 4 National Insurance as self-employed earners from 6 April 2014.
Most entertainers were treated as self-employed for tax purposes until the introduction of regulations in 2003, which took such taxpayers to be employed for the sake of NI.
Entertainers are to set to be designated as self-employed for National Insurance (NI) purposes, following a decision by the government to repeal the current rules.
The change means actors, singers, musicians, and other performers will pay class 2 and class 4 National Insurance as self-employed earners from 6 April 2014.
Most entertainers were treated as self-employed for tax purposes until the introduction of regulations in 2003, which took such taxpayers to be employed for the sake of NI.
The Revenue consulted earlier this year on changes to simplify the process, having recognised the tax administration complications suffered by performers. The department has settled on its preferred policy of taking the affected individuals out of class 1.
Baker Tilly’s David Heaton said the main attraction of the NI change is the simplicity it will create. “The class 1 rule is immensely difficult to operate, for contributors and HMRC, so paying class 2 and class 4 will be good news.
“The other benefit for those who engage entertainers is that the 13.8% employer surcharge on labour costs will disappear, making the UK more competitive as a production location,” Heaton added.
The updated set-up may adversely affect benefit entitlements. The old rules aimed to ensure performers could claim jobseekers’ allowance when not working, while new the new self-employed status will reduce the benefit, now universal credit.
The Department for Work and Pensions has confirmed that entertainers will be treated as self-employed for the purpose of universal credit, but they will be exempt from work search and work availability requirements provided the department accepts the self-employment is gainful.
A summary of responses to the taxman’s consultation includes a draft of legislation needed to change the current regulations. Technical comments should be emailed no later than 20 November.
