The FEU is a specialist division of HMRC that was set up to ensure that production companies correctly account to HMRC for tax due when non-UK artists/entertainers and sportspersons perform in the UK.
The HMRC website has a comprehensive guide to the taxation of foreign entertainers/ sportspersons and the rules are complex such that it is only possible to give an overview here.
The general principal is that where an overseas resident entertainer or sportsperson works in the UK then they are subject to UK taxation on these earnings and on their UK expenses. In such circumstances withholding tax must be taken from the performer at the prevailing basic rate of UK tax. The Production Accountant needs to fill out an FEU1 form which shows earnings/expenses and the tax deducted and the Artist should be given one part of this form. The second part should be sent to the FEU with the payment (or with details of the online payment made). The third part is kept for the company’s own records. You are not allowed to duplicate or copy these forms so take care when handling the originals.
Whenever you make a payment from which you have deducted withholding tax, you must complete a tax deduction certificate, form FEU 2.
This form is in 3 parts
Part 1 : Send to accounts office at the Accounts Office, Shipley, together with your form FEU 1.
Part 2 : Keep this for your own records.
Part 3 : Give this to the payee as a certificate of the payment made and tax withheld.
If the payee loses the original certificate and requests a duplicate, this must not be issued, tell them to contact the Foreign Entertainers Unit. The web link for the foreign entertainment unit is:-
Social Security Position
If the individual is self employed there will be no Class 4 NIC liability.