The Government’s decision to repeal current National Insurance regulations for self-employed musicians and entertainers has been welcomed by the Association of British Orchestras and the Musicians’ Union.
The changes announced by Her Majesty’s Revenue and Customs mean that freelance musicians and singers will make Class 2 and Class 4 payments from the beginning of the new financial year in 2014. Current legislation obliges self-employed performers to pay higher Class 1 contributions towards the National Insurance scheme, something the ABO claimed ‘could have proved disastrous for the UK orchestral sector’.
Some orchestras were thought to be at risk and lucrative potential income from foreign-based film producers was under threat as concern mounted about the extra expense of higher employers’ NI contributions accompanying the engagement of British musicians.
The move follows an 11-week consultation earlier this year and fierce lobbying by industry bodies representing performers with support from the All Party Parliamentary Group on Classical Music. More than 11,700 individual responses ‒ 7,613 of them from musicians ‒ were also received by HMRC in support of changes to the regulations.
ABO director Mark Pemberton said: ‘We are delighted that the government has agreed to repeal the National Insurance regulations for self-employed entertainers. The threat to our members, and the damage to their competitiveness, caused by the ruling that self-employed musicians should be liable for Class 1 National Insurance has been of immense concern to the ABO, and it is testimony to the campaigning efforts of the ABO, the Musicians Union, other music organisations and musicians themselves that the government has acted so swiftly to find a solution’.
John Smith, general secretary of the MU said: ‘The Government’s decision to repeal these regulations is fantastic news for musicians and for the wider music industry, and the MU is grateful that HMRC acted so swiftly on this important issue’.
Lord Lipsey, chair of the All Party classical music group said the move had ‘removed the Sword of Damocles hanging over our orchestras and our musicians’ and welcomed HMRC’s reversal of its original ruling.
A note of caution was voiced by the actors’ union Equity, which warned the changes could prove detrimental to low-earning performers and said it would continue to monitor ‘the ending of dual status carefully. HMRC has assured Equity that it has never been its intention to reduce performers’ access to benefits, and we will be putting that to the test’.