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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Tax treatment of the entertainment industry: theatrical performers: fees paid to agents: amount of the deduction

Section 352 ITEPA 2003Where a deduction is permitted by Section 352 ITEPA 2003 it applies to fees paid either:

  • under a contract with a person who carries on a trade or profession as an employment agency, or
  • to a Co-operative Society that acts as agent for its members.To be deductible the fees must be calculated as a percentage of the earnings of the employment.

The amount of the fees that can be deducted, including any VAT payable on them, is limited to 17.5% of those earnings.

Agents fees are usually between 10% and 15% of a performer’s income, so the limit of 17.5% will normally cover an agent’s fee together with any VAT paid on it.

Where a performer requests a deduction and it does not breach the 17.5% limit it should usually be accepted. If, exceptionally, you wish to check whether a deduction is due you should ask the performer to produce documentary evidence.