Entertainers lose special status NIC treatment

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The government is to repeal the current special status National Insurance regulations for entertainers following a consultation which revealed widespread support for freelance actors, musicians and other performers to adopt the same approach as all other self employed earners, reports Harris & Co chartered accountants.

HMRC"s consultation, which ran for 12 weeks and ended in early August, looked at four options for simplifying the regulations, which were introduced in 1998 and were originally intended to offer earnings-related contributory benefit entitlement to self employed entertainers with sporadic work patterns. Under the scheme, freelance performers were allowed to pay Class 1 NICs so that they would be eligible for support such as contributions-based Jobseeker"s Allowance (JSA), rather than Class 2 and Class 4 contributions.

There were 11,814 individual responses to the consultation National Insurance and Self-Employed Entertainers, of which 11,714 supported HMRC"s preferred option of repealing the regulations. The small number of objections to the proposal came largely from actors, who had concerns about how the change in status will affect eligibility for Universal Credit when this is rolled out.

The majority agreed with HMRC"s view that the present regulations are complex and challenging to administer, given the changes in the way much of the entertainment industry now operates. The largest group of respondents were musicians, many of whom take part in several different engagements during the day and can employ stand ins, which makes calculating employer and employee NICs difficult.

HMRC says that from 6 April 2014, those individuals engaged as an actor, singer, or musician, or in any similar performing capacity will pay Class 2 and Class 4 NICs as self employed earners. It has published a document summarising the consultation responses which includes a draft of the legislation needed to change the regulations, and is asking for technical comments to be submitted by 20 November 2013 to paye.policy@hmrc.gsi.gov.uk.

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