Do you have to pay higher tax in the entertainment business?

emerald_starcat

Just to settle an arguement. Does someone in the entertainment business have to pay more tax or do they pay the same as anyone else that is self-employed?
Please note I am referring to people self-employed in the entertainment business.
If someone could help I will be very grateful.

Pennywise

Everyone pays the same rates of income tax regardless of their
occupation, trade or profession.

But some trades/professions will get different tax reliefs, i.e. a business-man can't get tax relief on buying a suit for meetings, but an actor can get tax relief on a costume used only when on stage. So it really depends on the type of expenses they incur because of their trade/profession. BUT, you have to spend the money to get tax relief!

Of course, some trades/professions can "move offshore" to get their income taxed at lower rates, i.e. singer-songwriters often "live" in Switzerland and make sure they're never in any other country long enough to become resident for and liable to tax. Same with F1 racing drivers and other personalities/celebrities. If your "entertainer" found themselves often doing world tours or several weeks at a time in different countries, then it's quite possible they could "offshore" so they avoid paying UK income tax.

Mikeyorks

emerald_starcat wrote: »

Does someone in the entertainment business have to pay more tax

The tax rates (20% thru 50%) are income geared. So as 'entertainers' are often over / higher paid then will generally contribute more at 40% / 50%.

But anyone - irrespective of trade - pays those rates at that level of taxable earnings.

emerald_starcat

I tried to tell him that but he thinks they are taxed at a higher rate. Some people you just can't get through to!

Itismehonest

Tax the same but traditionally one of the groups hammered for car insurance

PlutoinCapricorn

It would be interesting to hear where this idea came from: I have never heard it before. There is usually a misunderstanding involved. For example, many people think that students do not pay income tax, but where this is the case it is because they don't earn enough, not because they are students.

Why not ask why he thinks this is true.

Mikeyorks

PlutoinCapricorn wrote: »

It would be interesting to hear where this idea came from: .

I've always suspected it arises from the initiatives to tax foreign entertainers (and sports people) - consequent upon the difficulty prising it off them once they had left the UK. It attracted a fair bit of publicity at the time. And the dedicated HMRC team is still just titled Foreign Entertainers Unit.

http://www.hmrc.gov.uk/feu/feu.htm

emerald_starcat

He has no evidence to support his arguement. I think he was talking a load of twaddle. He will no longer talk about it! Anyway thanks everyone.

Mikeyorks

emerald_starcat wrote: »

He has no evidence to support his arguement.

Funny that my OH always alleges that !