Taxman targets agents’ fees

Taxman targets agents' fees

Richard & Judy case concerns clampdown on offsetting of agents' fees against tax bills, with hundreds of millions said to be at stake

The taxman is set to try and recover hundreds of millions of pounds from
celebrities as part of a clampdown on the offsetting of agents fees against tax
bills.

HM Revenue & Customs’ court battle with Richard Madeley and Judy Finnigan
concerns the issue, The Sunday Times reported this weekend.

The tax authorities believe the pair, as well as a host of other television
presenters, authors and footballers, have wrongly set off the cost of employing
agents against their tax bills.

The case, first revealed by Accountancy Age two weeks ago, has been heard
before the Special Commissioners, and the result is due shortly.

The Sunday Times quotes a Revenue source, saying: ‘The Revenue believes that
the law only allows actors, musicians and dancers to claim that agents are a
necessary business expense. Therefor, it is seeking to recover tax from other
entertainers, sportsmen, authors and anyone else who has written off the expense
of their agents.

‘This encompasses a large number of high-profile people and if the special
commissioners rule in favour of the Revenue in the Richard & Judy case, they
will seek to recover tax going back six years on top of the current year.’

The story also says that official estimates of the tax gap, which are not yet
finished, have put the amount of tax avoided and evaded at between £97bn and
£150bn, or between 8% and 12% of GDP.

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