Will production companies suffer from NIC burden

Some accountants are concerned that changes to the National Insurance contributions levied TV production companies could leave them facing a financial burden.

Grant Thornton and the PACT are calling on HMRC to provide clearer guidance on NICs for actors. They have also asked production companies to inform them of their experiences dealing with National Insurance.

Actors often class as self-employed when it comes to income tax, but in order for them to have access to some social security benefits, changes were made to the regulations so that certain actors were treated as employees for National Insurance.

However, the change did not include “key talent”; i.e. those actors who have regular work. They are still classed as self-employed for NICs and income tax.

Last year a tribunal ruled that ITV needed to pay the NICs for actors with a contract that involved a salary element. This was to be applied with immediate effect to all new and renewed contracts. Now, Grant Thornton says the Revenue is trying to claim NICs retrospectively.

Production companies may be liable to a backdated bill for up to six years and this could leave them facing a significant bill for employers national insurance. Furthermore, they will also have to pay the employee’s share regardless of whether they can recoup that money from the actors concerned.

The head of production services at the Producers Alliance for Cinema and Television, Barry Kimm, said they want to collect evidence from production companies as to their dealings with HMRC on this topic so that the industry can work with the Revenue to ensure the correct amount is collected and transparent guidelines are laid down for the future.

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