Is fame any protection?

Is fame any protection?

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One of our actor clients has seen his TV career take off in the last few years. The limited company vehicle through which he operates is a couple of years old and it’s paying dividends in terms of reduced tax and NI liabilities as companies now pay EntCo Ltd. Money emerges as (minimal) wages and divs.

However, we’ve been appraised or Revenue investigations of people abusing this and deeming that this arrangement constitutes a Service Company for NI purposes, although not for tax purposes.

This applies to it if the fees are by the nature of a salary, but not if he’s being paid a fee for the series. The guidance notes on this (www.hmrc.gov.uk/guidance/nicrules-ents.pdf) are reluctant to be definite about where the border lies between stars (not governed by these rules) and riff-raff. Equity’s take on it is equivocal but basically says you might want to stop being a company quickly before the Revenue notice and attack for both employer’s and employee’s Class 1s.

So Jack Duckworth would be earning a salary and therefore Class 1-able, but when Sir Ian McKellern joined Coronation Street for 2-3 weeks he wouldn’t have been.

But just how famous/irregular do you have to be to avoid being treated as a Service Company?

Marion Morrison

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By Swiss Toni
20th Feb 2009 14:52

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Not on this website!

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