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HMRC have issued Revenue & Customs Brief 35/13 to set out the official position on the liability of entertainers to pay National Insurance (NI) contributions, subject to the proposed changes in the Social Security (Categorisation of Earners) Regulations being approved by parliament.
HMRC have issued Revenue & Customs Brief 35/13 to set out the official position on the liability of entertainers to pay National Insurance (NI) contributions, subject to the proposed changes in the Social Security (Categorisation of Earners) Regulations being approved by parliament.
Performer will no longer be included in the provisions of the regulations from 6 April 2014, from which date earnings will no longer be within Social Security Contributions and Benefits Act 1992, s 6 (which places a class 1 NI charge).
Earnings will be self-employed income and subject to class 2 and class 4 NI where there is no class 1 charge.
Class 1 contributions are charged at the time of payment rather than the time of the engagement or the contract of engagement being entered into, meaning entertainers paid under a contract for services (self-employment) will be liable to class 2 and class 4 from April 2014, and engagers will not be required to operate class 1 on earnings.
Engagers who use an automated payroll system or an external payroll provider service will need to ensure their systems or payroll arrangements are updated to ensure class 1 NI contributions continue to operate on payments made to entertainers up to 5 April 2014, and cease to be operated from the following day.
HMRC expect voluntary compliance with the regulations detailed in Revenue & Customs Brief 29/13 and do not intend to undertake concerted compliance activity in respect of entertainers for retrospective recovery of class 1 contributions for years before 2014/15.
But the tax department will continue to apply its standard approach to identifying individual cases that represent a high risk.
