ITV Services Ltd v Revenue & Customs [2010] UKFTT 586 (TC) (23 November 2010)

ITV Services Ltd v Revenue & Customs [2010] UKFTT 586 (TC) (23 November 2010)

The Tribunal held that payments to actors under the various forms of contract (other than walk-ons) were not computed by reference to the amount of time for which work had been performed, but were for availability or for a fixed fee agreed in advance. Therefore, such payments did not constitute 'salary' as defined in the Categorisation Regulations post-2003, and ITV was not liable for secondary Class 1 NICs in respect of those actors. Walk-ons, whose payments were computed by reference to time worked, did receive salary within the statutory definition.

Citation
[2010] UKFTT 586
Parties
Appellant: ITV Services Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
23 November 2010
Procedural Posture
Appeal / First Tier Tribunal (tax) Decision in Principle
Outcome
Appeal allowed in principle for actors (other than walk-ons); ITV not liable for secondary Class 1 NICs for those actors.
Legal Topics
National Insurance Contributions, Employment Status, Categorisation of Earners, Definition of Salary, Entertainment Industry Contracts
Tax Law Social Security Law National Insurance Contributions Employment Status Categorisation of Earners Definition of Salary Entertainment Industry Contracts

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Parties

ITV Services Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Appeal / First Tier Tribunal (tax) Decision in Principle

Legal Issues

  1. 1 Whether actors engaged by ITV are to be treated as employed earners for National Insurance purposes under the Categorisation Regulations as amended in 2003.
  2. 2 Whether payments to actors constitute 'salary' as defined in the relevant legislation.
  3. 3 Whether the contractual arrangements for actors differ from those for 'walk-ons' in a way that affects NIC liability.

Ratio Decidendi

The Tribunal held that payments to actors under the various forms of contract (other than walk-ons) were not computed by reference to the amount of time for which work had been performed, but were for availability or for a fixed fee agreed in advance. Therefore, such payments did not constitute 'salary' as defined in the Categorisation Regulations post-2003, and ITV was not liable for secondary Class 1 NICs in respect of those actors. Walk-ons, whose payments were computed by reference to time worked, did receive salary within the statutory definition.

Court Disposition

Appeal allowed in principle for actors (other than walk-ons); ITV not liable for secondary Class 1 NICs for those actors.

Orders

  • ITV not liable for secondary Class 1 NICs in respect of actors whose payments are not computed by reference to time worked.
  • ITV remains liable for secondary Class 1 NICs in respect of walk-ons.