Tax for Foreign Entertainers and Sportspersons

Introduction

If you're paying a foreign entertainer or sportsperson for UK appearances, you must usually deduct tax before paying them and send it directly to HMRC. This article explains when withholding tax applies, how to calculate it, the exemptions available, and what performers need to do to comply with UK tax rules.

Who the Rules Apply To

The withholding tax rules apply when you pay someone who doesn't live in the UK for performing or appearing in the UK. This covers a wide range of people including:

Entertainers:

• Actors, singers, musicians and dancers
• Conductors, choirs and variety entertainers
• Models (in certain circumstances)
• Television and radio personalities
• Sports pundits and puppeteers

Sportspersons:

• Footballers, cricketers and tennis players
• Boxers, golfers and athletes
• Motor racing drivers, jockeys and cyclists
• Darts players, snooker players and chess players

The rules apply whether the person appears individually or as part of a group or company.

What Counts as a UK Appearance

An appearance can be live or recorded, and includes:

• Acting in theatre, TV, radio or film productions
• Concerts, festivals and sports events
• TV commercials and advertising
• Catwalk modelling at events where an entrance fee is charged
• Promotional activities and photo calls
• TV and radio interviews
• Endorsement of goods or services

What Payments Are Subject to Withholding Tax

Withholding tax must be deducted from payments above the personal allowance threshold. The payment doesn't need to be directly connected to the UK appearance itself. Examples include:

• Appearance fees and performance fees
• Box office percentages and tour income
• Endorsement fees and advertising income
• Broadcasting and media fees
• Film fees and merchandising income
• Achievement bonuses and prizes (such as a car)
• Winnings from sports events
• Expenses paid to the performer

Even if a payment is made through a third party, you must still deduct withholding tax.

When You Don't Need to Deduct Withholding Tax

You don't need to deduct withholding tax in these situations:

• The total of all payments to the performer in the tax year doesn't exceed the personal tax allowance
• The payment is a cancellation fee
• The performer is a UK employee paying tax through PAYE
• You're paying for copyright, royalties, or advances on royalties
• Payments for sales of audio recordings (digital downloads, CDs, vinyl, cassettes) based on proceeds or non-returnable advances
• Payments to models at still photographic shoots
• Payments to catwalk models at events not open to the public (even if filmed or streamed)
• Payments made directly to film directors, cameramen or technicians
• Payments for supporting services like venue hire, equipment, ticketing, security or catering

How to Register and Calculate Withholding Tax

Before making payments to foreign entertainers or sportspersons, you must contact the Foreign Entertainers Unit (FEU) to register for withholding tax. Provide your company name and address, contact name, and telephone number on headed notepaper or by phone.

For most payments over the personal allowance, deduct tax at the UK basic rate of Income Tax (currently 20%).

Important: If you know in advance that you'll make several payments totalling more than the personal allowance, you must start deducting tax from the first payment, even if that payment alone doesn't exceed the allowance.

Example 1

A promoter pays an artist £8,000 at the start of the tax year with no plans for further engagements. As this is below the personal allowance, no tax is withheld. Later in the year, they pay the same artist £5,000. The total now exceeds the personal allowance, so the promoter must withhold basic rate tax from the second payment (but doesn't need to revisit the first payment).

Example 2

A promoter engages an artist for £8,000 but knows they'll pay another £5,000 later in the tax year. Because the total exceeds the personal allowance, they must withhold basic rate tax from both the first and second payments.

Tax Deduction Certificates

After deducting withholding tax, you must provide the performer with an FEU2 tax deduction certificate. This shows how much tax has been deducted and can be used as proof of payment towards their final UK tax bill and, in most cases, their home country tax bill as well.

Paying Expenses and Providing Assets

If you pay expenses directly or provide assets (like airline tickets) to a performer, this is treated as if the tax has already been paid. This means you must pay the tax to HMRC from your own funds using a "grossing up" calculation:

1. Divide the net payment by 80% to find the gross amount

2. Multiply the gross amount by 20% to find the tax due

Example

You buy a £1,000 airline ticket for a singer:

• Gross up: £1,000 ÷ 80% = £1,250
• Tax due: £1,250 × 20% = £250 (which you pay to HMRC from your own funds)

If you fail to deduct withholding tax when required, you may have to pay the tax yourself and could be charged interest.

Reduced Tax Payment Applications for Payers

You can apply for permission to pay expenses or transfer assets without paying withholding tax from your own funds. HMRC will agree if the benefit is an allowable expense of the performer's trade.

To apply, write to HMRC with:

• A copy of the contract with the performer
• A list of all expenses you're paying, including costs
• Details of any assets transferred

Reduced Tax Payment Applications for Performers

Foreign entertainers and sportspersons can apply to pay a reduced rate of withholding tax, so the amount deducted is closer to their expected final tax bill. To apply, submit form FEU8 at least 30 days before payment is due. A separate application is needed for each tour or visit. If an appearance is added or cancelled, you must send a new FEU8.

Additional Information Required

Depending on the type of performance, HMRC may request:

Film actors: A filming schedule showing UK filming days. Your UK tax bill is calculated using UK filming days divided by worldwide filming days. Future payments connected to UK filming (deferred, contingency, or residual payments) are also subject to UK tax.

Performing companies and groups: Employment status confirmation, sample contracts, list of all performers with nationalities and residences, payment details, expenses, and copies of agreements with conductors or soloists.

Musicians and bands: A copy of the engagement contract with the UK venue and promoter. Income includes merchandising sales at venues, sponsorship, non-recoverable record company support, and promotion payments (which are likely allowable as expenses).

Sporting appearances: If your earnings depend on your final performance (such as tournament position), you may not be able to apply for reduced withholding.

Allowable Expenses

Expenses paid to you count as income and may be subject to tax. However, expenses wholly and exclusively connected to a UK performance can be deducted before tax is calculated. Allowable expenses include:

• Production and pre-production costs
• Food and drink
• Fees or commission to managers and agents
• UK travel costs
• Air fares directly to and from your home country for a UK performance
• Accommodation and support staff
• Use of training facilities
• Other expenses agreed with HMRC

Expenses for medical treatment, personal security, or entertaining aren't usually allowed. If expenses cover both UK and non-UK activities, HMRC will allocate a proportion to UK appearances.

Tax on Worldwide Sporting Income

Sportspersons are taxed on a proportion of worldwide earnings based on time spent in the UK. This includes endorsement and sponsorship income. The calculation must be approved by HMRC and supported by evidence.

HMRC recommends using either:

Relevant Performance Days (RPD): Any day you compete, practise your sport in public, or undertake a public event for sponsors (such as photo sessions with sponsor's equipment).

Relevant Performance and Training Days (RPTD): This includes performance days plus training days. A relevant training day is any day you spend 3 or more hours in physical activity contributing to your sport's performance. Training sessions must last at least 1 hour each to count towards the 3-hour requirement.

Don't include time spent travelling, injured, resting, on holiday, or doing non-physical training (such as sports psychology or physiotherapy). A day counts only once, even if you train and compete on the same day (always counted as a performance day).

Example

A swimmer's routine involves swimming for one hour then spending one hour in the gym twice daily. These count as training days. On alternate days, she swims for 45 minutes, rests, then spends one hour in the gym and 45 minutes completing other training.

Self Assessment Obligations for Performers

If the tax withheld is less than what you actually owe for the tax year, you must tell HMRC by 5 October of the next tax year. You need to do this every year. Failure to notify HMRC about additional tax due may result in penalties.

You must complete a UK Self Assessment tax return if:

• HMRC asks you to, or
• The withholding tax deducted is less than your total UK tax liability for the tax year

Before completing your return, read the HS303 Self Assessment helpsheet.

VAT Considerations

When calculating withholding tax, don't include VAT in the amount subject to tax deduction.

Sources

• Pay tax in the UK as a foreign entertainer or sportsperson
• Pay tax on payments to foreign entertainers and sportspersons
• Non-resident entertainers and sportspersons (Self Assessment helpsheet HS303)

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.