guidance for visiting entertainers resident outside of the UK

This is a most specialised and often misunderstood area with a potentially massive impact on the non-resident artistes who come here to entertain.

HMRC are keen to ensure that fees earned in the UK by foreign entertainers are taxed here and have instituted various safeguards to prevent non residents leaving without disclosing financial information about their visit and paying tax, if appropriate.Sponsorship deals are also targeted by HMRC, even if negotiated overseas.

The Foreign Entertainers Unit (FEU) is a specialist unit within HMRC which:

1. agrees the UK tax liabilities of individual non-resident entertainers and sportsmen who appear in the UK;

2. manages the UK withholding tax system. This applies to anyone who makes payment to/for non-resident entertainers and sportsmen.

Non-UK resident entertainers who perform in the UK fall within specific arrangements for taxing payments for that UK activity. Withholding tax should be deducted by payers and, in some cases, Self Assessment returns will be required.

At haysmacintyre, we can advise our clients on how to minimise their tax liabilities under these regulations. We will, on a client’s behalf, agree an arrangement with the FEU and this should normally cover and include interested parties such as the payer, the entertainer and the promoter. This agreement allows the payer to deduct an amount which is less than the basic rate of tax to reflect the fact that allowance expenses will be incurred. An arrangement may be made to move responsibility to withhold tax to a particular point in a payment chain by means of a “middleman” arrangement. Some activities may give rise to a change of payments which could be income for a concert and may flow from a venue to a promoter and then to the artiste. Theoretically, every payer in the chain must deduct tax as required by law. However, we can advise how to move the withholding point further down the chain so that transactions between specified payers can be made without deduction of tax once the position has been agreed with the FEU.

Example:
A venue is chosen for a concert. Normally the owners control the box office and pay over the ticket proceeds less its contractual entitlement to the concert promoter. He deducts his costs before paying an agreed amount to the artiste. If the promoter makes a “middleman” application the FEU may agree to nil withholding leaving the promoter as the withholding point. Following our negotiations with the FEU the promoter will be instructed to deduct tax at a reduced rate once we receive the Revenue’s agreement on behalf of our client. These arrangements often result in a vastly reduced tax liability and, depending on the circumstances, the payment may even be reduced to nil.

Naturally each category of visitor requires its own specialist advice and these can be
divided as follows:-

• film and TV
• popular music
• performing companies visiting the UK
• realised tax payment application (Non-Resident employees)

The team at haysmacintyre would be pleased to advise all of the above groupings and this advice may differ depending on the particular specialism.

We normally guide each client as to precisely the level of documentation required for a successful application and will undertake all negotiations with the FEU on the client’s behalf. If final filing of a Tax Return is required we can assist you to satisfy the Revenue’s requirements and, most importantly, to claim the maximum level of tax relief due.