National Insurance – entertainment industry
HMRC have published a new Revenue & Customs Brief (29/13) that summarises the National Insurance implications for the entertainment industry following the Court of Appeal decision in the case of ITV Services Ltd.
The case concerned the employment status for National Insurance Contributions purposes of actors engaged by ITV under a variety of contract types. The Court of Appeal unanimously upheld the decisions of the First Tier Tribunal (FTT) and Upper Tribunal (UT) that the actors’ contracts provided for remuneration by way of salary and there was liability for Class 1 National Insurance contributions on all the remuneration payable under the contract. This decision reinforces HMRC’s view that the majority of entertainers in the TV, film and theatre industries, engaged on Equity contracts, are to be treated as employed earners for National Insurance Contributions purposes.
In light of the decision there is a liability for retrospective Class 1 National Insurance Contributions. The extent to which HMRC will seek to apply the Court of Appeal decision retrospectively will be determined by a number of different factors including whether a previous written opinion had been given or not.
HMRC have stated that they do not intend to undertake concerted compliance activity in the media sector following the ITV case. However, HMRC will seek to identify cases where there is a high risk of tax avoidance and continue to scrutinise those cases which are currently under investigation.