The Income Tax (Entertainers and Sportsmen) Regulations 1987

Tax Payments—rules for calculation

4.—(1) Each of the sums mentioned in paragraph 2(2) and (3) of Schedule 11 (“tax payment”) shall be calculated in accordance with the rules prescribed by this regulation.

(2) Except where it is otherwise provided by these Regulations or there is an arrangement to which this regulation refers, the tax payment shall be a proportion of the connected payment or of the value transferred by a connected transfer equal to the basic rate of income tax for the tax year in which the payment or transfer is made.

(3) (a) Subject to sub-paragraph (b), where the connected payments and the value transferred by connected transfers for a tax year made to an entertainer, or to a person who is connected with him or who is an associate of his, do not together exceed £1000 the tax payment shall be a nil amount;

(b) connected payments and the value transferred by connected transfers made by any person who is connected with any other person by whom connected payments or connected transfers are made to the entertainer, or by any associate of such other person, shall together be treated as constituting a single connected payment in determining whether they exceed £1000.

(4) An arrangement to which paragraph (2) refers is an arrangement in writing between the Board and the person by whom the connected payment or connected transfer is made, the entertainer, or the recipient of the connected payment or connected transfer, made following a decision by the Board on an application to which regulation 5 refers, under which the tax payment is an amount which, as a proportion of the connected payment or value transferred by the connected transfer, is an amount less than the said basic rate (“reduced tax payment”).

(5) The reduced tax payment may be arrived at by reference to a percentage of the connected payment or of the value transferred by a connected transfer or as a lump sum calculated without reference to any such percentage.

(6) In making an arrangement of the kind to which paragraph (2) refers the Board—

(a) shall, subject to sub-paragraph (b) and paragraph (7) below, at all times aim at securing that the tax payment shall be, as nearly as may be, the amount of the liability to tax of the entertainer or other person arising in relation to the connected payment or connected transfer under the Tax Acts, Schedule 11 and these Regulations, and

(b) may take into account the fact that the liability to the Board for tax has, in a manner satisfactory to them, been secured or otherwise provided for, whether by a guarantee (of whatever person) or other means.

(7) Where—

(a) a person makes a connected payment or connected transfer in relation to a relevant activity, and

(b) in respect of the same relevant activity that person has received a connected payment or connected transfer in respect of which the amount of the tax payment has been paid under these Regulations,

the person concerned shall not be required to deduct out of the connected payment or pay in respect of the connected transfer (to which sub-paragraph (a) refers) any sum to which paragraph 2 of Schedule 11 applies unless, and to the extent that, the tax payment which then falls to be made exceeds the amount of the tax payment to which sub-paragraph (b) refers.