BREXIT

11th March, 2020

GENERAL

The United Kingdom left the European Union on January 31st, 2019 following the decision in the 2016 referendum. However, it remains inside the EU VAT regime until 31 December 2020.

On January 31st, 2019, the UK left the political structures of the EU. These include the following –
– EC Council;
– EC Commission;
– EC Parliament; and
– the European Court of Justice (ECJ).

However, as part of an agreed eleven month transition period, the United Kingdom will remain within the EU trading structures:-
– the EU VAT regime;
– the Customs Union; and
– Single Market. It is very difficult to determine the implications of Brexit and more so now that the UK Government wants to put a non-extension on Brexit negotiations. I have been to some seminars on the issue and the overriding view was that still no one really knows. But, here are some of the likely issues.      

IMPORT/EXPORT/CUSTOMS

The major issue that was highlighted was the fact of border checks coming into the United Kingdom and exiting the United Kingdom into the European Union. This also possibly applies incidentally from Northern Ireland to the Republic of Ireland and the reverse. You need, for each tour, to assess which customs and trade registrations, authorizations and reliefs must be put in place. These enable customs clearance and duty payments. They also meet relevant regulatory licensing requirements and secure available duty reliefs. The major customs agents or brokers are well versed in the potential issues and they will be important in easing the filing of customs declarations. Getting all production to a show on time is obviously paramount. The Calais-Dover crossing is the major United Kingdom-European Union link and any issues that arise will often arise there.      

CONTRACTS

You should review with the agents the current contracts you have in place as many will lack provisions to deal with Brexit. Again, this applies in particular to customs and trade. The changing relationship between the United Kingdom and the European Union will mean that it is critical to assess all contracts. The focus should be given to determine if the buyer or seller handles fulfilling relevant customs obligations, including the lodging of customs declaration and the payment of customs duties.      

CASH FLOW ISSUES

Import VAT is a duty of customs. A result of Brexit is that it now poses a cashflow challenge for companies trading cross-border with the United Kingdom. Import VAT will be charged at the border when importing goods in the United Kingdom. Border delays could exacerbate this issue.      

TOUR PARTIES

Immigration is the one area where a clear picture is emerging. The United Kingdom has outlined details of its settlement scheme and temporary residence scheme. Systems and immigration policies will need to be reviewed and updated for the tour personnel. European Union artists may, in the future, need to meet the same criteria as those from the United States and other nationalities as of January 1st, 2021. Currently, the majority of US acts and those of many other nationalities do not need visas to tour the United Kingdom for a short amount of time. Promoter issued paperwork is usually sufficient to present on entry to the United Kingdom. This could mean more paperwork for EU acts touring in the UK and points potentially to more bureaucracy for the live touring industry. It also still remains to be seen whether the EU reacts in like manner to UK artists visiting the EU.      

CURRENCY FLUCTUATIONS

 There will be fluctuations in currencies between the Euro and GBP£ and GBP£ and other currencies including the US$. Uncertainty will reign until the final deal is settled which may well be all of 2020. This will affect your artist overage/deal currencies and also where you utilize United Kingdom vendors. Focus on shifting the currency risk, as always, wherever possible.

Philip

ILMC 29 Arthur Awards Most Professional’s Professional

 

Our President, Philip Brennan, has been nominated for an Arthur Award at ILMC 29 for Most Professional Professional.

On behalf of everyone at tmi business management, it is an honour to be nominated and is testimony to our company’s hard work and to the invaluable assistance we get from promoters, agents, management and advisers on all our tours, without whom we would not be able to do our job.

We thank you all,

tmi business management

Withholding Tax Clearance Problems and Delays

 

We are finding that Tax Clearances are becoming more difficult to obtain and also to obtain in an orderly time-frame.

More artists are touring regularly in order to make up for the earnings shortfall in record sales (Forgive me, any millennials reading this and wondering what record sales are!). In addition, artists are having to become much more creative in generating new revenue streams, often around their touring activity. However, tour cash flow is a far greater issue for touring artists due to the lack of alternative revenue streams available to fund the tours.

However, this increased activity also means that the various Tax Authorities worldwide are having to deal with more activity and new revenue streams but with the same and in some cases fewer staff. The significant delays are causing funding problems for artists. A tax credit is no substitute for cash.

We have noticed delays of a number of months in –

    • Belgium
    • Germany
    • United Kingdom

In addition, in Germany the local offices are no longer dealing with tax submissions from Artist representatives but this has now been transferred back to the German Federal Tax Office. This has resulted in both delays and a reversion to the previous intransigence in terms of accepting costs incurred by independent production companies with the result that the artists earnings are taxed on gross before any deductions.

The Tax Authorities can only process so much with the personnel and time available but with increased activity this is causing problems for all sides.

Philip

Updating Tax Newsletters

 

Hi,

We are currently updating all our Tax Newsletters to take account of new regulations and new Tax Treaties.

So keep a look out on our website for the new updated Tax Newsletters. You can download at any time free of charge.

Remember, if you need further information on any of the territories please do not hesitate to contact us. We are here to help.

Philip

Touring in Canada

We have included a new Newsletter Download today.

The document sets out the requirements for non-resident Artists visiting Canada. The document is very extensive and was prepared by our good friend, Dave Pennington. Dave is a Canadian who specializes in this area and his knowledge is extensive.

If you are visiting Canada and are in need of assistance, you can contact either ourselves or Dave directly at –

Dave Pennington

Muskoka Management Ltd.

Tel:  705 732-1200

Cell: 705 773-9604

Fax: 705 732-4468

email:  dpennington@vianet.ca

AIM: MuskokaMgmt

We hope this summary is of assistance to you.

Philip

2012 A Good Year; 2013 into the Unknown

 

Another year over.

Despite the tough times we are experiencing, we at tmi business management continue to survive and thrive. For that we would like to sincerely thank all our clients for their new and continued business in the year. We worked on various tours during the year – Guns n’ Roses, Lady Gaga, Madonna, MIKA, Sting – in what was a busy year in touring. We hope we at least met your expectations and in some cases maybe exceeded them. We will continue to strive to do our very best for you.

2013 will be a year where tax authorities will likely look to maximize their tax take from visiting artists and may look to re-visit past years. We look forward to the battle.

Don’t forget that we are experienced at production accounting on tours and also assisting on the management of the production itself. Remember that much of a tours costs are tied up in production costs and control and reporting on a regular basis is vital to ensure a successful result. This is something which you are in a position to control. We are here to help.

We wish you a successful 2013.

Philip

TOURING IN SOUTH AMERICA

 

To assist our clients touring in South America, we have set up a production company in Canada.

This company, tmi business productions (Canada) Ltd. This is a first venture for tmi business management into South America and is done so with the help of a tried and trusted Canadian partner who has agreed to be a major shareholder in the company.

The company will enable us to use our extensive production and international taxation experience in a more focused manner in South America and assist our clients directly in that territory with that experience. In addition, a Canadian company is best placed to take advantage of the Double Taxation Treaties which exist between that country and countries such as Argentina, Chile and Peru amongst others.

We are excited about the opportunities this new venture will bring to our clients.