National Insurance contributions and self-employed musicians

National Insurance contributions and self-employed musicians

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The MU has been advised by Her Majesty’s Revenue & Customs (“HMRC”) that, based on an Upper Tier Tribunal appeal hearing in the case of ITV Services Ltd v HMRC, they now consider self-employed musicians fall within the regulations for Class 1 National Insurance (“NI”) contributions.

Previously, HMRC’s Guidelines On The Special NIC Rules For Entertainers (issued in April 2005) provided a specific exemption for session musicians.  Please see Section A, Clause 10 of http://www.hmrc.gov.uk/guidance/nicrules-ents.pdf. HMRC are currently reviewing these guidelines in light of the Tribunal decision.

This decision widened the scope of the Social Security (Categorisation of Earners) Regulations, and could mean that musicians are now caught within these regulations, depending on the terms of their contract of engagement. 

Where performing musicians’ fees are computed by reference to time (e.g. for a recording session or live gig) this may now mean the employer has to deduct from the fee and pay HMRC 12% Class 1 NI (the employee’s contribution).  Additionally, the employer may also be liable to pay the 13.8% employers NI contribution.

If employee NI is paid by your employer/engager on your behalf you should ensure you are provided with appropriate documentation from the employer/engager confirming it. Having had class 1 NI paid by your employer/engager, you do not then need to pay class 4 self-employed NI  for the same work.

We were notified of this at a meeting with HMRC on October 4th, and informed that as the ITV Upper Tribunal decision is part of case law, it came into effect from its publication date in February 2012. However we understand there is a further appeal pending to the Court of Appeal, and will update members on the result of that in due course.

For more information please see: 

http://www.hmrc.gov.uk/briefs/national-insurance/brief1912.htm

The MU is committed to campaigning for an amendment to these regulations and will be meeting representatives from HMRC again on October 16th to discuss this matter in more detail.

For further information please contact Ben Jones, National Organiser, Recording & Broadcasting on ben.jones@themu.org

Posted: October 5, 2012

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