HomeInsightsControversial NIC treatment for entertainers to be repealed


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Up until now, a large number of ‘self-employed’ entertainers have been regarded as ‘employed earners’.  This has meant that Class 1 National Insurance contributions were potentially due (and needed to be deducted at source) on their earnings.  Once this change takes effect next year, there should be no more confusion.  Individuals engaged as actors, singers and musicians (or in similar performing capacities) will be personally responsible for paying Class 2 and Class 4 National Insurance as self-employed earners.

The news follows a Government consultation spearheaded by HMRC who, despite their hard line in the recent ITV case on the entertainer provisions, pushed for a change to reduce their administrative burden.  From almost 12,000 responses, an overwhelming 99% agreed that the controversial provisions should be repealed.  With the new TV tax credit already showing signs of success, it is hoped this development will further reduce the pressure on production budgets and provide an additional boost to the UK film and TV production sectors.  We would certainly agree this is a very welcome development for the industry.

There were only a hundred responses in opposition and these were led by Equity.  Their concern related to the recent welfare reform which, when combined with the repeal of the entertainer provisions, could result in the reduction or removal of welfare benefits for Equity members between jobs.  It’s hard to deny this could be an issue for some entertainers.  The possible implication may be a push from Equity to negotiate higher agreed rates with producers and broadcasters in their collective bargaining agreements and it will be interesting to see how this develops. 

The draft legislation to repeal the provisions is available and the Government welcomes any comments by 20 November 2013. 

If you would like any further information, please contact Charles MooreChris Hammond or Seth Roe.