UK withholding tax for entertainers and sportspeople

If you pay a non-UK resident entertainer or sportsperson for performing, appearing or competing in the UK, it’s important to be aware of withholding tax (WHT). This article gives an introduction and explains how BKL can help.

What is withholding tax?

In the UK, withholding tax (WHT) refers to tax being withheld from income due to the recipient by the payer, and directly paid to HMRC.

WHT is also referred to as deduction of tax at source (i.e. from the payer of the income), or payment on account against the recipient’s final UK tax bill.

WHT applies to payments over the personal allowance (£12,570) and is usually worked out at the basic rate of income tax (20%).

Who qualifies for WHT?

Entertainers who qualify for WHT include actors, dancers, models, musicians, singers and media personalities.

For sportspeople, the list includes athletes, chess players, cricketers, footballers, snooker players and tennis players.

What activities qualify for WHT?

As examples, appearances and performances such as acting (stage, screen or radio), advertising, concerts, festivals, sports events and interviews. These may be recorded or live, with or without an audience.

What kind of payments qualify for WHT?

HMRC’s list includes:

  • advertising income
  • appearance fees
  • broadcasting or media fees
  • endorsement fees
  • expenses
  • film fees
  • merchandising income
  • prizes
  • shares of box office sales
  • TV rights
  • tour income
  • winnings

As these examples show, some qualifying payments may not have a direct connection with the UK appearance or performance.

When doesn’t withholding tax apply?

As listed by HMRC, situations where the payer doesn’t have to deduct WHT on a payment include:

  • cancellation fee
  • if the total of all payments to the entertainer or sportsperson in the tax year do not go over the personal tax threshold (£12,570)
  • to an employee who pays tax through PAYE in the UK
  • to anyone on the middleman scheme list: a list of Government-approved people and organisations available here
  • copyright, royalties, or advances on royalties
  • to other people for supporting services such as venue or equipment hire, ticketing, security or catering
  • to models at still photographic shoots
  • to catwalk models at an event not open to the public, even if that event is filmed or streamed
  • to film directors, cameramen or technicians
  • for sales of audio recordings if the payments relate to the proceeds of sales, sales at a live performance, or a non-returnable advance on future sales

Reduced or zero rates of WHT may apply under a double taxation treaty if HMRC accepts an appropriate claim.

How does personal allowance affect WHT?

HMRC advise: ‘If you know in advance that you will make several payments which will in total exceed the personal allowance, you must start deducting tax from the first payment – even if the personal allowance has not yet been reached.’

HMRC give this example:

‘A promoter engages with an artist at the beginning of the tax year for a fee of £8,000.

The promoter also knows they will be engaging with the artist later in the tax year for a further £5,000.

As the total for the two shows exceeds the UK personal allowances, they should withhold basic rate tax from both the first and second payment.’

How does registration for WHT work?

You should register for WHT before you begin making payments to a non-UK resident entertainer or sportsperson for a UK activity. This is done via the Foreign Entertainers Unit (FEU).

At the end of each accounting period, you’ll receive form FEU1.

If you’ve deducted tax from a payment made to a foreign entertainer or sportsperson, you should provide a signed copy of form FEU2 to HMRC with form FEU1), to the person you paid and keep one for your own records.

How does withholding tax differ outside the UK?

Some countries don’t operate WHT, e.g. Denmark and Ireland. Like the UK, some countries use a tax on net profit basis, e.g. Australia and the US. In South America and mainland Europe, most countries tax the gross income which the performer or sportsperson will receive, but at a lower rate.

If you’re UK-based performer or sportsperson planning appearances overseas, it’s best to seek guidance on your destinations’ tax regimes in advance. We’ve covered that in more detail in this article.

How BKL can help

As with all taxes and their conditions – especially those with an international dimension – withholding tax can be complex. To avoid penalties and pitfalls, it’s best to seek professional advice, particularly for touring.

Our music, media, entertainment and sport team include highly experienced specialists from Alan Heywood & Company, who joined BKL in March 2024. Together, we have decades of expertise supporting people, groups and organisations across the sector.

We can help you and your clients with the entire WHT process, including registration, budgeting, cashflow forecasting, dealing with HMRC and the FEU and making payments.

Music and entertainment clients who we’ve advised on WHT include:

  • A Japanese artist performing in the UK – we made a successful claim for a reduced rate of WHT with the FEU department
  • A band with non-UK members touring in the UK – as payments to the non-UK band members would exceed their personal allowances, WHT applied. We helped to arrange the correct payments and deductions between the venues and the promoter, and the promoter and the band members; we also completed and filed the relevant FEU forms

Through our membership of the International Sports Tax Association (ISTA), we can also connect sports industry clients to overseas specialists for added support.

To find out more, please get in touch using our enquiry form.

NICOLA HALL

BILSHAN MENSAH

Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.

ELANA DIMMER

Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.

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