Pay tax in the UK as a foreign performer
How to apply for a reduced rate of Withholding Tax as a foreign performer and work out your tax on worldwide earnings.
Withholding Tax on earnings in the UK
If you are a foreign performer or sportsperson appearing in the UK, you are liable to pay UK tax on earnings linked to UK appearances.
If payments to you will exceed the UK Personal Tax Allowance, the person who pays you will deduct a percentage and pay it direct to HM Revenue and Customs (HMRC). This payment on account against your expected final UK tax bill is called Withholding Tax and it is usually made at the rate of 20%.
You will receive a certificate FEU2, from the person paying you, showing details of the tax deducted. This payment on account can be used as a credit against your final tax liability in the UK and (in most cases) in your home country.
You will need to complete a UK tax return if:
- HMRC asks you to
- you believe that the wrong amount of Withholding Tax has been deducted
Additional guidance on completing your self assessment is available for foreign performers in the UK in Help Sheet 303.
Apply for a refund
If you think the amount of Withholding Tax deducted from your payment is too much, you can make a claim for a repayment at the end of the tax year. Write to the Foreign Entertainers Unit and include:
- the original FEU2 certificate issued to you
- details of expenses related your UK performances
- a copy of the contract between you and the payer
- details of any other UK income received during the tax year
- your full name and address
- your nationality and country of residence
- a signed declaration of who the repayment cheque should be made payable to
- the address to send the repayment cheque to
Make a Reduced Tax Payment Application
To bring the amount of Withholding Tax you pay closer to your expected final tax bill, you or your authorised representative can apply to pay a reduced rate. Make a Reduced Tax Payment Application in writing to the Foreign Entertainers Unit or using form FEU8 at least 30 days before the payment is due.
An application is required for each tour/visit to the UK.
Submit a revised application if an appearance is added or cancelled.
What you must provide
An application can’t be processed until all the required information and detailed figures are received. Please make sure that you include:
- dates of arrival in and departure from the UK
- whether you are likely to return to the UK before 5 April
- a projection of actual or estimated total income from all sources, including expenses paid to you
- the date of each performance/event
- the name and address of the venue and the promoter
- your projected actual or estimated allowable expenses in relation to UK appearances
- a signed or unsigned copy of each relevant contract or agreement
If there is not a signed contract, include any emails or letters confirming the agreed fee and any other details. If there is only a verbal agreement, give the detail of the agreement in your application.
Show how figures have been arrived at (including the basis for any estimates) and how expenditure has been shared out between different countries.
Provide a film schedule, showing the dates when you were involved in principle photography.
Performing companies and troupes
Your application must also include:
- a statement confirming the employment status of the performers
- a sample of copies of performers’ contracts
- a list of all participating performers, their nationality and country of residence
- a breakdown of the salary (or pro-rata share of monthly salary) paid to each performer
- details of any fee or share of the profit due to each performer
- details of all expenses paid to your performers in relation to UK performances
- copies of any separate agreement/contract with any conductor, soloist and anyone else who makes a public appearance on stage
Musicians and bands
Your application must also include a copy of the engagement contract with the UK venue and promoter.
When calculating income from UK performances you should include payments from:
- the sale of merchandising at venues
- non-recoverable record company support
- filming or recording of the performances
- miscellaneous income from television and radio for example, timed to coincide with touring
- promotion payments, for example from record companies (subject to exemptions for expenses paid on the basis that these are likely to be ultimately allowable for UK tax purposes)
- flat rate fees for recording
Do not include income from:
- recording where the payments are calculated by reference to the number of units sold
- sales of merchandising at normal retail outlets unconnected with the performing activity
Expenses paid to you, for example travel costs, are regarded as income and may be subject to tax.
Expenses you pay that are ‘wholly and exclusively’ in connection with a UK performance may be deducted from your income before tax is calculated. Expenses deductions are usually allowed for:
- production and pre-production costs
- general subsistence
- fees or commission to managers and agents
- UK travel
- air fares to and from the UK to perform (if the performer returns directly to their home country)
- support staff
- use of training facilities
- other expenses agreed with HMRC
Expenses for medical treatment, personal security or entertaining are not usually allowed.
If you receive expenses or income to cover both UK and non-UK activities, a fair proportion will be allocated for appearances in the UK.
If your earnings are uncertain because they are dependent upon the outcome of a performance (for example your final position in a tournament) you may not be able to make a Reduced Tax Payment Application.
Payments relating to worldwide activities
You will be taxed on a fair proportion of your earnings from worldwide activities based on time spent in the UK. A share of endorsement or sponsorship income, for example is chargeable to UK tax. Exactly how much of your income you are liable to pay UK tax on will depend on the precise wording of the contract and how much time you spend performing and training in the UK. The calculation you use must be approved by HMRC and supported by evidence.
HMRC recommends using either the Relevant Performance Days (RPD) or Relevant Performance and Training Days (RPTD) method. If you use a different method of calculation, provide your reasons for using the alternative method and supporting evidence.
Using RPD to calculate the amount of endorsement income liable for UK tax
- Add together all RPD worldwide and in the UK.
- Divide UK RPD by worldwide RPD.
- Multiply your income from endorsement by the result.
Trevor is a swimmer who lives outside the UK. He has 1 endorsement contract with a sports company that pays him £10,000 for competing and attending promotional events. He has another with a breakfast cereal manufacturer that pays him £20,000 for competing and attending promotional events.
In the year he has a total of 18 performance days, 3 of which are in the UK. He also attends 1 promotional event outside the UK for the sports company and 2 for the cereal company, which count as promotional performance days.
Trevor uses RPD to work out the amount of income from his endorsement contracts that are liable for UK tax.
For the sports company:
- UK performance days (3) + UK promotional days (0) = 3
- total performance days (18) + total promotional days (1) = 19
- 3 divided by 19 = 0.16
- 0.16 X 10,000 = £1,579
For the breakfast cereal company:
- UK performance days (3) + UK promotional days (0) = 3
- total performance days (18) + total promotional days (2) = 20
- 3 divided by 20 = 0.15
- 0.15 X 20,000 = £3,000
Using RPTD to calculate the amount of endorsement income liable for UK tax
- Add together all relevant training and performance days (RPTD) worldwide and in the UK (UK RPTD)
- Divide UK RPTD by worldwide RPTD
- Multiply your income from endorsement by the result
Example of using the RPTD calculation
Alice is a table tennis player who lives outside the UK. She earns £20,000 from an endorsement contract with a sports company that rewards her for competing in tournaments.
To calculate how much of her income from the endorsement is liable for UK tax Alice decides to use the RPTD calculation as follows:
- 40 competition days 40 (including 5 days in the UK Championships)
- 175 training days (90 in the UK)
- divide the sum of UK Performance and training days (95) by the total performance and training days (215) = 0.44
- multiply her total worldwide earnings from the endorsement contract by the result: 20,000 X 0.44 = £8,744
Definition of relevant performance days (RPD)
Activity in private will not be counted as a performance day but it may be a training day.
Activity in public will not be counted as a training day but it may be a performance day.
A day on which you compete and train can only be counted once and will always be regarded as a performance day.
A relevant performance day is any day on which you:
- take part in a competition
- practise your given sport in public (for example a tennis player practising on an open court where the public can watch)
- undertake a public event for your sponsors (for example taking part in a photo session wearing or using your sponsor’s kit)
Definition of relevant training days (RTD)
A relevant training day is any day on which you spend 3 or more hours in physical sporting or training activity, which contributes towards performance of your sport. Training must include physical activity and each session should last 1 hour or more to count towards the 3 hour requirement. A training session may be:
- directly practising the sport you are endorsed for
- an activity designed to maintain general fitness (for example spending time in a gym or other general fitness training such as road running or jogging)
Do not include time spent:
- travelling when no training is done
- injured when training is not possible
- resting or on holiday
- doing non-physical training, such as sports psychology or physiotherapy
A swimmer’s routine in the build up to a competition is to swim for 1 hour then spend 1 hour in the gym twice a day. These days count as training days.
Every other day of the year she swims for 45 minutes, rests, then spends 1 hour training in the gym and 45 minutes completing training journals or at physiotherapy or sports psychology appointments. These days do not count as training days.
Provide records, completed at the time, that clearly identify the type, length and place where the training or competition took place, such as copies of:
- competition agreements
- training diaries
- practise and competition schedules
- a daily log of training
- other daily records