A well known actress has won her VAT tribunal case against HMRC, allowing her not to charge and account for VAT on acting services supplied to the production company for her performance in the 2006 film “Perfect Creature”.
Saffron Burrows, who has also appeared in “Deep Blue Sea”, and more recently “Troy”, appealed against an assessment raised by HM Revenue and Customs for £18,616 plus interest on the basis that the acting services provided by her did not fall within the definition of “cultural, artistic and entertainment” services in article (9) (2) (c) of the EC Sixth Directive. The result being that her service would be treated as supplied where she “belongs” (in this case the UK) and therefore subject to VAT.
HMRC argued unsuccessfully that in order for a service to be classed as that of a cultural, artistic or entertainment nature there must be a live performance involved in front of a live audience and therefore, in the absence of a live audience, could not cover the services provided in the course of making a film.
The Tribunal found that the supply of acting services did fall within article (9) (2) (c) of the EC Sixth Directive and therefore was outside the scope of UK VAT.
Janice White of PEM VAT Services commented, “This is an interesting test case. The place of supply of services rules for VAT are complicated but the decision of the Tribunal will mean that actors who “belong” in the UK are on a par with actors from other countries as, according to the decision, they will only be liable to charge VAT if their services take place in the UK.”
This case is being used as a test case and obviously has far reaching implications for the acting industry as a whole. It is not clear whether HMRC will take this further through the courts, but for the moment actors based in the UK can breathe a sigh of relief.
For further information on any VAT related issues, please contact the VAT team at PEM on 01223 728222 or visit www.pem.co.uk/vat
Date:14 December 2007
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