‘Foreign entertainers’ and sportspeople (including Brits based abroad) pay UK income tax on their UK earnings (read more about Foreign entertainer tax rules on the gov.uk website)
Agencies and venues commissioning talent have to deduct tax at 20% on payments made for entertainers services, even if the payment is going to another company rather than direct to the performer. Where no deduction is made, the payment is ‘grossed up’ so tax is 25% of the original payment amount.
Seven things to consider when you hire a star:
- Do you have a fixed budget? Get the contractual right to deduct tax – or you might have to pay 25% more!
- They want to be paid gross? Speak to us about whether a lower tax rate can be negotiated with HMRC.
- Going to be some expenses? Apply in advance and you may not have to pay tax on these – leave it till after and the tax is due.
- Paying through a middleman? Apply in advance and you may not need to handle the tax – leave it till after and the tax is due from everyone in the chain.
- Rock or pop act? Use an approved promoter and they, not you, have the tax headache.
- More classical? They have their own list too.
- Do I really have to do this? Maybe not – there are some exemptions – but if you’re not sure, please do get in touch.
For examples of when Foreign Entertainer tax is applicable, please read our article ‘A Bolt out of the Blue – visiting sport stars taxed in UK’.
Author: Samuel DooleyThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.