Tour Promoters – How to Reduce Withholding Tax
In our post “Withholding Tax, Tour Promoters & Overseas Artists” we looked at HMRC’s withholding tax system and how it applies to overseas artists performing in the UK. In essence, promoters must deduct a 20% withholding tax from all income generated by the non-resident artist.
However, it is possible to apply to the Foreign Entertainers Unit of HMRC to reduce the amount of tax withheld from 20%.
When should I make an application to reduce withholding tax?
Your application must be made at least 30 days before the date the payment is due.
How do I make an application to reduce withholding tax?
You can simply make an application in writing. However, the easiest way to apply is to complete the HMRC form FEU 8. The application can be made by you in person, or with the assistance of your accountant.
When making an application, you will be required to provide the following information in respect of the artist:
- dates of arrival in and departure from the UK;
- whether the artist is likely to return to the UK in the same tax year;
- a projection of actual or estimated total income;
- the date of each performance and the name and address of the venue;
- a schedule of the projected actual or estimated expenses which will be incurred; and
- a copy of any relevant contract (these do not need to be signed).
The application should give sufficient information to show how any figures have been calculated.
Has my application been successful?
If your application is successful, the Foreign Entertainers Unit will send you a form FEU 4. This is your confirmation that you can pay a reduced level of withholding tax. Please note that no reductions from the standard rate of 20% can be made until a form FEU 4 has been received.
How long does it take the Foreign Entertainers Unit of HMRC to process my application?
The Foreign Entertainers Unit has indicated that they generally hope to process applications within 30 days. However, this is not guaranteed and, at certain times of year such as Christmas and during the festival season, applications can take longer than 30 days to process.
A timely application is therefore recommended.
If you have any further questions or queries then please feel welcome to contact Mark Roberts on 0161 826 9309.
Please note that the information in this post is general information only. It is not intended to be relied upon as a substitute for independent legal or accounting advice. Please consult your lawyer or accountant for advice based on your particular circumstances.