HMRC are at it again, this time targeting entertainers who trade through their personal service companies. We understand that a number of high-profile performers across the entertainment industry have been subjected to tax enquiries, purporting that the income received by their companies is tantamount to salary. If this were the case, such income would also be subject to national insurance contributions.
When you factor in that the taxman can go back 6 years and that National Insurance is payable both by the company and the performer personally, it is clear the HMRC’s move could result in a sizeable bill.
All is not lost though and there are still various arguments to put forward in a performer’s defence to reduce or eliminate the liability. One thing is for sure, however; a performer should be very wary of using a personal service company going forward and, needless to say, professional advice should be taken.
For further background reading: The Stage http://bit.ly/kdobQy