Release of The Odyssey: Key tax considerations when engaging foreign entertainers in film production

After much anticipation, The Odyssey has been released. A blockbuster with an official budget of $250m, the figures involved are of epic proportions – fitting for the theme. The UK was one of several filming locations for the production, raising an important financial consideration: what tax obligations apply to non-UK resident actors working in the UK, and what responsibilities do the businesses engaging them need to understand?

These rules are broadly framed and can create withholding tax and reporting obligations for both UK and non UK-based production companies, as well as others in the payment chain.

Who is affected?

The regime applies to non-UK resident individuals performing as entertainers in the UK, including:

• Actors, musicians, singers and dancers
• Models and content creators
• TV and radio personalities and other performers

The term “Entertainment” is broad, capturing performances made available to the public, including film and television production activities.

Complex payment chains: What payments fall within scope?

The rules apply not only to direct payments but also to wider arrangements, including:

• Payments made to third parties (e.g. loan-out or personal service companies)
• Box office and other performance based bonuses
• Associated payments, including reimbursed expenses

Since film productions often involve multiple parties, such as agents, intermediaries and production entities, it is important to be mindful that:

• Each payer in the chain may have a withholding obligation
• This continues unless HMRC issues a direction or clearance modifying the position

If not managed properly, there is risk of creating overlapping or duplicating withholding obligations.

In the case of The Odyssey, where filming took place in multiple locations including Scotland, Italy, Iceland, Greece and the US, cast members are likely to have been subject to multiple foreign tax withholding regimes, creating the accompanying need for correct allocation of fees across each territory.

HMRC advance clearance

Applying a reduced rate of UK withholding under the alternative treatment requires advance clearance from HMRC:

• Typical lead times are 1–2 months or longer
• Early engagement is critical to avoid cash flow inefficiencies and compliance risks

Compliance and risk

To offset any risk, engagers must:

• Account for tax deducted and report to HMRC
• Maintain appropriate documentation and records

Failure to comply can result in:

• Penalties and interest
• Potential liability for the unpaid tax falling on the engager

How we can help

We support clients across the film and entertainment sector by:

• Identifying withholding tax exposure on engagements
• Managing HMRC clearance applications
• Advising on structuring and cash flow implications
• Ensuring full compliance with UK reporting and withholding obligations

If you would like to discuss how these rules apply to your production or upcoming projects, please get in touch with our team.