Making Tax Digital for Income Tax: What foreign entertainers need to know
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) represents a significant change in how certain individuals with business or property income must maintain records and report information to HMRC.
Under current legislation, individuals will fall within the MTD ITSA regime if their total business and/or property taxable income in the UK exceeds the following thresholds:
- £50,000 per year – from April 2026
- £30,000 per year – from April 2027
- £20,000 per year – from April 2028
How do these changes affect foreign entertainers?
Under UK tax rules, foreign entertainers (individuals who are not UK tax resident) are liable to UK tax on income arising from UK performances.
Many foreign entertainers earn substantial income from UK engagements and may exceed the MTD thresholds. However, the government has stated foreign entertainers will be exempted from the rules, unless they also have UK property income or other business income that falls within the regime.
This is a welcome position. In practice, MTD would offer limited benefit for foreign entertainers given:
- the complexity of maintaining digital records for occasional UK engagements; and
- the existing withholding tax regime that already applies to their UK performance income.
Although the policy intention is clear, we understand that the exemption will not be applied automatically. Foreign entertainers, therefore, need to consider whether they fall within one of the other automatic exemptions or deferrals, or whether an application to HMRC is required.
If a foreign entertainer receives a letter from HMRC advising that they fall within the MTD rules, this generally indicates that an automatic exemption has not been applied, and an exemption application will need to be submitted. It is important to note that copies of these letters are not sent to acting UK agents and they should be notified of any communications from HMRC about Making Tax Digital.
Relevant key exemptions and deferrals
Below is a summary of the key exemptions and deferrals most likely to be relevant.
No National Insurance number
Individuals who do not have a National Insurance number are exempt from MTD ITSA. This exemption should apply automatically.
Non-UK resident entertainers are generally not liable to UK National Insurance contributions, meaning many do not have a National Insurance number. As a result, many foreign entertainers will fall within this automatic exemption.
2026/27 – deferral for all income
For 2026/27 individuals who filed non-residence supplementary pages (SA109) with their 2024/25 tax return, or who expect to file them in 2026/27, are entitled to a temporary one-year deferral in respect of all income. As non-residents, foreign entertainers will fall within this group. This will mean that even where a foreign entertainer has UK property or other business income, they will not come within MTD until April 2027 at the earliest.
Where an SA109 has been submitted for 2024/25, this deferral should apply automatically, Otherwise, an application will need to be made.
Where a foreign entertainer has a National Insurance number (and so cannot rely on the exemption mentioned above) they will need to apply for exemption in respect of their income from UK performances arising after 5 April 2027.
Income ceases before the mandation date
Foreign entertainers with UK property or other business income should also be aware that if that income ceases before their mandation date they will not need to register for MTD.
For example:
- UK property income exceeding £30,000 is received in the 2025/26 tax year; and
- that income ceases before 5 April 2027 (perhaps because the property is sold).
In this situation, the individual would not be required to register for MTD from April 2027. Where HMRC are aware that a business has ceased (because a Self-Assessment return showing the cessation has been submitted), the individual should not need to take further action. If, however, HMRC have not yet been notified, they will need to take steps to let HMRC know that MTD will not apply.
Property or business income continuing post April 2027
Where a foreign entertainer has UK property or other business income continuing post April 2027, they may need to register for MTD and meet the relevant record keeping and reporting requirements. We would recommend that individuals in this position take advice in good time to make sure that they are prepared for MTD.
Next steps
Given the interaction between non-residence status, National Insurance position and MTD income thresholds, each case should be reviewed individually.
If you would like tailored advice on how MTD ITSA may affect foreign entertainers or other non-resident individuals, please contact a member of our team.
