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Actor expenses when receiving a P60

Hi all,

I have an actor friend (not quite a client!) who is self-employed, but for NI purposes is treated as an employee (following HMRC special rules for entertainers).

He therefore gets a P60 for 2 of his acting jobs which will be entered on the ‘employment’ pages on his SA tax return.

My dilemma is that I am unsure as to how to treat the expenses (mainly commission paid to his agent & travel costs to the jobs). If put in the self-employment pages it would create a loss, which may not look right. I was therefore planning to treat them as employment expenses, but would the travel have to be disallowed as it would be seen as ‘ordinary commuting’ between home & the place of work?

I found this thread:

http://www.accountingweb.co.uk/anyanswers/actors-tax-and-nic/482681

but my situation is a bit different & it has only had one answer so I wondered if anyone had anything to add…

Thanks!

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25th Jan 2012 09:01

In exactly the same cicumstances I included all the costs under the self employment section, with no resultant query from HMRC. In my case I could carry back the losses

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25th Jan 2012 09:03

The NIC treatment is only a concession so that actors can claim JSA while "resting" between jobs. For Income Tax all income and expenses should be treated under self-employed rules.

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25th Jan 2012 09:35

Box 101

Once you have a net profit figure for the guy, you then work out what amount of fees have been subjected to Class 1 and then stick the figure in Box 101 on the self-employment pages so as to avoid ending up paying Class 4 NIC on the same chunk of income.  Don't go down the deferment road.  And be aware that only a proportion of acting jobs have Class 1 taken off them.

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25th Jan 2012 21:48

Thanks very much Marion. I have now found the relevant box on HMRC Online to make that option appear!

Once the HMRC payroll reconciliations are done (automatically by now surely!) between employers P35's and individuals tax returns, would this not flag up an inconsistency?

Perhaps extra disclosure in the 'white space' may be of use ?

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25th Jan 2012 22:03

Inconsistencies - Oh Yes...

The Revenue get very messed up by this because into their system comes a P14 which has (say) income 10000.00, tax NIL, NI 600.00 and a code NT.  The computer has a tendency to then run amok, replace the NT code with 747L/BR for the following year and in some instances, treat this as a PAYE underpayment and try to collect some tax.

A lot of the major theatrical employers know to ignore these rogue codings and they carry on taking no tax, but some smaller ones do as they're told by the Revenue.  Then you have to ring the employer's tax office to get them to reinstate the NT code.   

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