HM Revenue and Customs Brief 11/14
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Issued 31 March 2014
The Social Security (Categorisation of Earners) Regulations
in relation to entertainers.
Regulation 60 of the Social Security (Contributions) Regulations 2001
Invitation to specified entertainers to apply to have Class 1
employee's NationaI Insurance contributions (NIC) treated as paid.
Who should read this?
Any individual engaged as an entertainer (i.e. actor, singer,
musician or in any similar performing capacity) under standard Equity
or Musicians' Union contract(s) for any period(s) between 6 April 2003
and 5 April 2011.
Agents or accountants acting for any entertainer described
above who potentially may fall into one of the categories further
Equity, Musicians Union officials or other representative
bodies able to identify any individual or groups of entertainers who
potentially satisfy the qualifying conditions described below. In these
circumstances it would be appreciated if this briefing was brought to
the attention of the entertainers concerned.
The Social Security (Categorisation of Earners) Regulations
1978 made provision for treating entertainers who were not employed
under a contract of service (an employee's contract) as employees for
NIC purposes. The Regulations were revised in 2003 to their present
format and it was announced in R & C Brief 35/13 that the
regulations are to be revoked from 6 April 2014.
R & C Brief 19/12 issued on 14 June 2012 set out
HMRC's position on the liability of entertainers following the decision
of the Upper Tribunal (UT) to uphold the decision of the First Tier
Tribunal (FTT) which dismissed an appeal in the case of ITV Services
Ltd v Commissioners for HMRC. A further appeal by ITV Services Ltd to
the Court of Appeal was also dismissed and the relevant details of this
decision were reported in R & C Brief 29/13 on 2 October 2013.
Both of these decisions effectively widened the scope of the
legislation as it stood following the decision of the FTT on 23
November 2010 to the extent that some contracts previously considered
not to fall within the legislation now did so. For that reason HMRC set
out its position on the retrospective application of the UT and COA
decisions in the above briefings as follows:
'Where HMRC had previously issued a written opinion to a party
that Class 1 NICs were not due in respect of a particular contract (or
identical contracts) because HMRC did not consider the relevant
payments to be "by way of salary," it would not seek recovery
retrospectively of the unpaid NICs that were due and payable prior to 6
April 2011.' This could potentially leave the individual entertainer
with a shortfall in their NIC record through no fault of their own
which HMRC is obliged to redress.
Where a liability to pay Class 1 NICs arises, those NICs
should be paid and recorded to the individual's NI account. However,
there are occasions, like those covered by this briefing, where despite
their being a Class 1 liability, no NICs are recorded on an
individual's account for that employment. Where this is the case it may
be possible to record the missing NICs as "Treated as Paid".
Treating as paid is legislative and is provided for under the
provisions of Regulation 60 of the Social Security (Contributions)
Regulations 2001. This regulation allows for unpaid primary Class 1
NICs to be treated as paid, but only for the purpose of entitlement to
Primary Class 1 NICs can be treated as paid provided the
failure to pay was not:
- with the consent or connivance of the employee; or
- attributable to any negligence on the part of the employee
Treating NICs as paid under regulation 60 may only be
considered when primary Class 1 NICs have not
been paid to HMRC.
Regulation 60 therefore serves to protect the benefit
entitlement of the individual where primary NICs have not been paid but
the employee cannot be held responsible for that failure to pay.
Primary Class 1 NICs will therefore be treated as paid where
we can establish that:
- there is a Class 1 NICs liability
- the primary Class 1 NICs have not been paid to HMRC
- the failure to pay was not due to the consent or
connivance, or any negligence on the part of the employee
In the case of qualifying entertainers the above will apply
and Primary NICs for those engagements can be treated as paid.
Arrangements for applying to have Class 1 employee's NI
contributions treated as paid
Who can apply?
HMRC believes that the Regulation 60 provisions apply to a
small number of entertainers who were engaged for periods between 6
April 2003 (when the current 'entertainers' regulations were
introduced) and 5 April 2011 and, for the period(s) of the
engagement(s), their engager did not pay employers and employees Class
1 NIC because HMRC had given a written opinion to their engager that
there was no liability for Class1 NICs.
How do I know if I am eligible to have Class 1 employee's NI
contributions treated as paid?
Applications for treating Class 1 employee's NI contributions
How to apply
Entertainers who were engaged to provide their services
between 6 April 2003 and 5 April 2011 and were aware or have been made
aware that a written opinion was given by HMRC between these dates that
no Class 1 NICs were due for that engagement are invited to apply by
downloading an application form CA9184 (PDF
204K) as soon as possible.
When applying all sections of the form must be completed to
enable us to check that your particular circumstances meet the criteria
for entitlement to have employees’ Class 1 NICs treated as paid. The
form will ask you to provide:
- the name of the party that engaged you (if this was not the
- the start and end dates that work was undertaken for the
engagement, the title of the entertainment production and the engager’s
name (producer of the entertainment)
- information relating to the frequency of payment i.e.
whether monies were received weekly/monthly etc...
- the amount of payment you received gross of any agent’s or
other fees for each tax year whilst employed by this engager
- details of any self employment undertaken during t he same
period that you were engaged
A copy of the original written opinion from HMRC should also
be included with the application where this is available.
Please address applications to:
Film & Production Unit, Floor 2
HM Revenue & Customs
Tyne & Wear
The above location applies to ALL applications whether from
entertainers in the TV industry, Film Industry or musicians. The
special arrangements which HMRC is making in order to undertake action
in these cases is expected to last no more than 2 years so it is
important to apply as soon as possible.
If your application is accepted you will be notified once your
NI record has been amended.
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Article Published/Sorted/Amended on Scopulus 2014-04-08 09:12:34 in Tax Articles