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Last updated: 17 Mar 2022
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UK tax rules for non-resident entertainers and sportspeople

Non-UK resident entertainers and sportspeople, and those that employ/hire them, can be liable to UK tax on performances and competitions undertaken in the UK. In this article, we share the special rules that govern this and why careful application is important.
Tax on UK performances

If you’re a foreign athlete or performer who is booked to perform and your UK income is expected to exceed your personal allowance (£12,570 for 2021/22), the payer must deduct withholding tax from the payment. The Foreign Entertainers Unit will only issue tax deduction certificates in your name and the total payment can be made up of both performance income and reimbursed expenses.

Tax on UK performances

For all performances in the UK, 20% tax is withheld on performance fees, taxed when the performance is undertaken.

Any expenses that are reimbursed also need to have tax withheld, with the reimbursement being the net value to you, the performer. This means that the payer must ‘gross up’ the expense and calculate the withholding tax on the gross amount.

As an entertainer or sportsperson, if you have UK performance income in excess of the Basic Rate band (£50,270 for 2021/22), the withholding tax may not be enough to cover your tax liability and you will be required to complete a UK tax return. In such cases, direct expenses that are incurred wholly and exclusively for the purpose of your business are deductible against your income. There is also scope to apportion an amount of the worldwide indirect costs based on the number of performances in the UK.

One significant point to note is that payments made to a seemingly unconnected entity, such as a service company, do not affect the UK tax treatment if it is controlled by you, the foreign performer. In such a case, the income is attributed directly to you and subject to UK income tax. Double taxation relief can very often be claimed, where available under the rules of your country of residence, for the UK tax paid against your domestic company or individual tax liability. 

About the author

Akin Coker

+44 (0)20 7556 1332
cokera@buzzacott.co.uk

If you’re a foreign athlete or performer who is booked to perform and your UK income is expected to exceed your personal allowance (£12,570 for 2021/22), the payer must deduct withholding tax from the payment. The Foreign Entertainers Unit will only issue tax deduction certificates in your name and the total payment can be made up of both performance income and reimbursed expenses.

Tax on UK performances

For all performances in the UK, 20% tax is withheld on performance fees, taxed when the performance is undertaken.

Any expenses that are reimbursed also need to have tax withheld, with the reimbursement being the net value to you, the performer. This means that the payer must ‘gross up’ the expense and calculate the withholding tax on the gross amount.

As an entertainer or sportsperson, if you have UK performance income in excess of the Basic Rate band (£50,270 for 2021/22), the withholding tax may not be enough to cover your tax liability and you will be required to complete a UK tax return. In such cases, direct expenses that are incurred wholly and exclusively for the purpose of your business are deductible against your income. There is also scope to apportion an amount of the worldwide indirect costs based on the number of performances in the UK.

One significant point to note is that payments made to a seemingly unconnected entity, such as a service company, do not affect the UK tax treatment if it is controlled by you, the foreign performer. In such a case, the income is attributed directly to you and subject to UK income tax. Double taxation relief can very often be claimed, where available under the rules of your country of residence, for the UK tax paid against your domestic company or individual tax liability. 

Overseas Workday Relief

Overseas Workday Relief

If you’re an entertainer or sportsperson who is UK resident but non-UK domiciled in the tax year, relief may also be available to you through Overseas Workday Relief.

An example of this would be Cristiano Ronaldo, who re-signed for Manchester United football club in the summer of 2021, and would potentially qualify for the relief in the 2021/22, 2022/23 and 2023/24 tax years. As Ronaldo has been non-UK resident for the previous three tax years and is likely to claim the remittance basis of taxation, he will only pay UK income tax on his earnings from his employment duties performed outside the UK, to the extent that those earnings are remitted to the UK. 

On the basis that Ronaldo is likely to have separate contracts for his UK and non-UK duties, Overseas Workday Relief will be applicable for his earnings in relation to duties performed overseas. For example, if Ronaldo has a single contract with a sponsoring company, his income from this company will be apportioned between his UK and non-UK days based on the number of UK and non-UK workdays in the year. The income from non-UK employment duties, as apportioned, will be taxable on a remittance basis, meaning Ronaldo will not be liable to UK income tax as long as the money does not enter the UK.

Speak to an expert
Speak to an expert

Although this is a very niche area of tax, which is standalone in what is required in the case of the employer and the performer, our tax experts have experience in advising on these cases and can support you. Fill out the form below and we’ll be in touch to discuss your requirements and how we can help.

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