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The deduction of tax at source at the basic rate from all payments made to an entertainer or sportsperson appearing in the UK would be inequitable where the costs of the appearance are substantial (such as a pop concert with elaborate lighting and sound effects). The amount of the tax withholding could not only exceed the entertainer's ultimate tax liability, but also make the UK visit commercially unviable. Therefore, detailed provisions allow a reduced or a nil tax rate to apply by arrangement with the Foreign Entertainers Unit (FEU)¹.

In order for a reduced tax withholding to apply, the payer, the entertainer or other intended recipient of the connected payment or transfer must apply in writing to the FEU at least 30 days before the payment or transfer is due to be made for the amount to be subject to a reduced tax deduction. Unless a reduced withholding arrangement is in force, tax must be deducted at the basic rate². An arrangement with the FEU must be agreed in writing by the Unit, but