Is a payment to a UK resident individual for their image rights under an overseas EU employment contract liable to UK Class 1 national insurance (the individual has been issued an A1)?
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In theory, probably not (you'd need to look at the contract).
In practice, HMRC have got stuck into this in a big way recently, particularly with sports people, and assert that the reality is that these aren't payments for image rights at all, they're remuneration for kicking balls about (or hitting them with sticks or whatever).
Obviously rebuttable but it's a long tough road.
many thanks Lion - as the individual concerned is being paid in respect of modelling work it may be easier to establish that is payment for their image
Or more difficult. If Brand X pay a kickballer's image rights company €100M for them being associated with brand X, it is likely that the payment is for the use of their image (or "personal brand") generally. In the case of a model, on the other hand, it is more arguable that it attaches to the assignments in which their image was captured, rather than in relation to their attachment to the brand. Depending on the facts, this distinction may be academic though.
I agree. Modelling looks like work. Standing in front of the camera may seem passive but the model has to be there, posing.
Having your picture stuck on some tat in the club shop looks far less like work. The issue there is whether there's a fair split between the payment forf the work and the payment for the image.
Surely there always are, if the newspapers are to be believed this does not deter HMRC re footballers.
(there was one such HMRC interest reported just a week or two ago, though now cannot remember who it was)
It's rife, DJKL.
In truth, the fact that there are payments for this and payments for that exacerbates, rather than ameliorates, the problem. The whole issue is about fair split and it's not easy to negotiate.
The question says that an A1 has been issued, and that there is an employment contract entered into with an EU employer, but the facts are incomplete.
An EU model working under an EU employment contract could easily be UK resident for tax purposes with no UK NIC liability, but a UK-origin and -resident model could have an EU employment contract and still be within UK NIC. If there is regular work in several member states, the UK may be competent because that is where the model is habitually resident. The EU test is based on *habitual* residence, ie, long term, not just residence in a particular tax year. Residence in UK terms for just a year or two would ordinarily be classed as merely a 'stay' in EU terms, not 'residence'.
Which social security authority issued the A1 - UK or foreign? That settles the question of competence (ie, which state has the right to levy contributions and the obligation to pay benefits).
If the model is insured in the UK, the questions relevant to the football cases are relevant to whether there is a payment of NICable earnings. If insurance lies with a foreign authority, the UK's stance on image rights payments is irrelevant, as no NICs can be due.
Arnt these arguments for class 1 nic based on footballers who receive royalties from a middle man company? Surely the argument changes when it's a direct payment? What I mean is. Hmrc obviously are going after those avoiding it by using a middle man when in reality it should be a direct payment?