Hundreds of high-profile actors face crippling retrospective tax bills and risk “losing their homes”, union Equity claims, after performer Robert Glenister lost a long-running dispute over national insurance contributions.
Equity, which has been backing Glenister, described the actor’s situation as a test case that will affect 60 performers who were part of a group the union was representing. However, it is understood hundreds more will be impacted by the case.
Equity accused HM Revenue & Customs of “conducting a coordinated attack” against its members more generally, and warned that Glenister’s case left other actors belonging to the test-case group facing the “threat of losing their homes” and “huge reputational damage”.
Glenister had been appealing a decision made by the first-tier tax tribunal in October 2017, which found him liable to pay thousands in backdated national insurance contributions covering a period of seven years, during which he provided services as a performer though a personal service company called Big Bad Wolff Ltd.
The appeal was rejected last week, leaving Glenister owing hundreds of thousands of pounds to the tax office, and many other actors facing similar retrospective charges.
Equity said it was now seeking an urgent meeting with the Department for Digital, Culture, Media and Sport about Glenister’s case.
“In terms of the test case participants, we expect the tax authorities to now pursue them for large sums of money. For the Equity members involved, the threat of losing their homes is now very real and the stress of this case has affected their careers,” it said.
Equity general secretary Christine Payne described Glenister’s case as “the latest assault” from HMRC on actors and warned that HMRC was preparing to “unleash their tax officials on our members”.
“HMRC’s attitude towards the creative community is fast becoming a crisis. We have written to the government to seek an urgent meeting to discuss why our members are being targeted in this way. The tax authorities need to realise that this union will never be bullied into submission, and will continue to challenge them in the defence of our members,” she said.
HMRC pursued Glenister for tax because it claimed the actor’s personal service company should be liable to pay not just primary Class 1 NI contributions but also what would normally be the production company’s NI, which Equity said amounted to 70% of the total allegedly owed.
The union said it supported Glenister’s case because it was “unfair that members would be liable for huge secondary employer’s NI contributions where such a liability could not possibly have arisen had they contracted directly” and not through a personal service company.
However, in the recent ruling, Justice Henry Carr and judge Jonathan Richards said Glenister believed entertainers should “enjoy the privilege of being able to avoid NI contributions by contracting through personal service companies rather than directly”.
They added that they had not seen “any provision explaining why entertainers should enjoy such privilege”.
Why did HMRC bring the case against Glenister?
HMRC made use of the Categorisation of Earners regulations, which had been enacted to help low-paid actors access contributory welfare benefits. HMRC accepted, however, that if the company was taken out of the picture, Glenister would have been regarded as self-employed for tax. The regulations in question were repealed in 2014.