Chat show pair hire star lawyer for tax song and dance

Patrick Way, the barrister who represented the tennis star in his fight over
sponsorship income, appeared for Richard Madeley and Judy Finnigan against HM
Revenue & Customs last month.

The news came as fresh details of the case emerged, with HMRC attacked this
week for ‘splitting hairs’ about which entertainers can deduct agency costs from
their tax bills.

The Richard and Judy case sees HMRC challenge employed entertainers who have
written off up to 17.5% of their earnings against tax as payments to agents.

Musicians, singers, dancers and theatrical artists can claim deductions
against taxable income, but under the strict terms of the law, TV presenters and
others cannot. But in practice, said advisers, they had been doing so in a
‘commonsense’ application of the rules.

‘It’s splitting hairs,’ said Mike Warburton of Grant Thornton. ‘Nobody
thought this was going to be taken in such a highly literal way, and I don’t
think parliament intended it should.’

Warburton said employed TV and radio presenters such as Terry Wogan and
Jonathan Ross could be affected by HMRC’s move if they had claimed for agents’
fees. He said the sums could total hundreds of millions of pounds in
retrospective charges.

The HMRC attack on Richard and Judy opens up the bizarre prospect of
entertainers having to establish their status to obtain deductions, with TV
performers having specific difficulties.

‘Supposing there’s a TV camera at a live show. If you do a song and dance,
you’re OK,’ said Warburton.

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