Entertainers – registration for Class II National Insurance:
We’re sure that all entertainers will be aware of the change in status that took place on 6 April 2014.
After a consultation process by HMRC that took place in the summer of 2013, it was decided that entertainers (actors, singers, musicians etc.) would be treated as self-employed individuals for the purposes of National Insurance from 6 April 2014. “Dual status” has ended from that date.
As an entertainer your earnings will, in the past, most probably have been treated as self-employed for income tax purposes, but would have had Class I National Insurance deducted at source (“Dual status”). In most cases, this would have meant that Class II was not payable.
From 6 April 2014, an entertainer will be treated as either self-employed for both tax and National insurance, or employed for both.
If you are earning as a self-employed entertainer (you have no tax or National insurance deductions at source) then you will need to make sure that you are registered for Class II National Insurance. You can register in 3 different ways:
– On line at https://online.hmrc.gov.uk/shortforms/form/CWF1ST?dept-name=CWF1&sub-dept-name=&location=40&origin=http://www.hmrc.gov.uk
– Complete form CWF1 and submit by post to HMRC http://www.hmrc.gov.uk/forms/cwf1-feedback.htm (click ‘trial from CWF1…..’)
– Phone 0300 200 3505
You can choose to pay your Class II contributions either by direct debit (monthly) or by invoice (6 monthly).
Make sure that you are registered as soon as possible.
What difference does it make?
Earnings – as you are no longer having Class I deducted at source, you should find that your weekly pay packet has increased. Beware – you will now also be subject to Class IV National Insurance. The amount due will be based on your self-employed earnings and will be added to the tax liability that you currently pay every January and July. You need to save the extra money that you are receiving now to pay for the additional liabilities that will arise later.
Benefits – there are some changes to the benefits that you will be entitled to from the state. A summary can be found here: https://www.gov.uk/national-insurance/what-national-insurance-is-for
National Insurance Class summary:
Class I – deducted at source from employees
Class II – a weekly contribution paid by self-employed individuals. A fixed amount (for 2014/15 £2.75 per week)
Class III – voluntary contributions that can be made if you’re not subject to any other Class
Class IV – paid by self-employed individuals, added to the tax that is payable every January and July.
The changeover may not be as straightforward as you think, if you are in any doubt about any of the above please do not hesitate to contact us for clarification.
Graham Berry FCCA – 25 April 2014
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