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Tax Tip

Are HMRC about to launch a task force against the entertainment industry?
Last summer, the HMRC Risk and Intelligence Service based in Cardiff wrote to entertainment agents and warned that a statutory information notice was going to be issued, requiring the submission of details surrounding payments they received on behalf of their clients. 
 
The information requested applied to all payments the agent received which belonged to or were for another person (including individuals, partnerships and limited companies) for the period 6 April 2012 to 5 April 2013 inclusive. 
 
The only payment information which did not have to be returned was where the total amount received by a performer was less than £1,000 during the year or where the payment received was liable to PAYE. 
 
Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Why are HMRC going after the entertainment industry?  Performers typically have several streams of income during any given accounting year including one off fees, repeat fees, royalty payments, advertising and endorsement monies and writing payments to name a few. 
From an expenses point of view, HMRC is always watchful of clothing, hairdressing and make up, travel and subsistence and use of home as office claims, which are all contentious areas of cost. So plenty for the team to look at.”
 
The letters issued last summer reassured the entertainment agents that ‘This is not a check of your tax affairs.’ It can, therefore, be assumed that HMRC is risk assessing the income declared and expenditure claimed for by the performers. 
 
Once the risk assessment process has been completed, HMRC could decide to simply adopt enquiries into those returns considered to be potentially incorrect.
 
However, if the process suggests widespread errors, HMRC may decide to launch a Campaign to encourage voluntary disclosures of inaccuracies. HMRC is targeted to launch four campaigns every tax year and targets chosen to date include medical professionals, electricians, plumbers, online traders and fitness coaches. 
 
TK continues
“A less likely option is for HMRC to use a Task Force approach. Task Forces typically focus on geographical locations and involve multi-discipline teams from different Government agencies. Unless the risk assessment highlights a particular problem, for example in London, with actors falsely claiming benefit whilst working, the Campaign approach would seem more inevitable.”
 
If you need any help and advice on HMRC campaigns and the benefits of belonging to the ABDS Fee Protection Scheme, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help
 
ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900 E-mail: abds@netaccountants.net
 
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Great with people  
Clear and precise with advice
Timely and cost effective
In touch with issues that face our clients
Mindful of our client’s long term strategic goals
 
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