Actors and tax

I’ve not had any queries across my desk asking about the tax position of actors, though it is something that could be pertinent to our FAA members (though I don’t think that there’s much question that people on relatively short engagements are totally ‘self employed’ by most definitions).

If a producer or a director is hiring an actor, they would have one real concern that arises from IR35…

“…will HMRC look at the employment relations that I have with these actors and accuse me of incorrectly determining their employment status?”

The reason they may ask this is that paying people as Sole Traders (i.e. invoice) means that no Employers NICs are paid, the employee’s NICs are slightly lower and the actors can also treat some of their expenses as liabilities in their personal business balance sheet when calculating their ‘profits’ which are taxable (HMRC treat everyone who is a sole trader effectively as an unincorporated personal business that pays tax on profits, not total income).

This isn’t a minor issue. HMRC can lose a very large amount of money on someone earning £40-£50k a year if they go off PAYE and onto working as a Sole Trader – and even worse if they go through a Personal Service Company.

I wouldn’t offer any direct advice to anyone on this – you’ll have to satisfy yourself that you’re doing the right thing if you’re hiring actors. Equity would have more detailed advice for actors and one could complete a CEST test for an imaginary actor and check this.

This article on Backstage may also help?

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