§ (2) In subsection (1)(a) after "subsection (2)" there shall be inserted "or (2A)".
§ (3) The following subsection shall he inserted after subsection (2)—
§ "(2A) Fees fall within this subsection if—
- (a) they are paid by the employee in pursuance of an arrangement under which a bona fide co-operative society agrees, or the members of such a society agree, to act as agent of the employee in connection with the employment,
- (b) they are calculated as a percentage of the emoluments of the employment or as a percentage of part of those emoluments, and
- (c) they are defrayed out of the emoluments of the employment falling to be charged to tax for the year concerned."
(4) The following subsection shall be inserted after subsection (3)—
(3A) Subsection (3) of section I of the Industrial and Provident Societies Act 1965 (co-operative society does not include profit-making society) shall apply for the purposes of subsection (2A)(a) above as it applies for the purposes of that section.
(5) The following subsection shall be inserted after subsection (4)—
(4A) Subject to subsection (4) above, a deduction by virtue of this section as regards a particular employment and a particular year of assessment may be based on fees falling within subsection (2) above or fees falling within subsection (2A) above, or both.
§ (6) The amendments made by this section shall apply for the year 1990–91 and subsequent years of assessment.
§ (7) Any such adjustment (whether by way of discharge or repayment of tax, the making of an assessment or otherwise) as is appropriate in consequence of this section may be made.'—[Mr. Maude]
§ Brought up, and read the First time.
§ Mr. Maude
I beg to move, That the clause be read a Second time.
In the debate on the taxation of actors in Committee, I proposed a change to the relief that we introduced last year which allows actors and other theatrical artistes taxed under schedule E to claim tax relief on fees that they pay to theatrical agents. Those fees can amount to 10 to 15 per cent. of an actor's income and it is therefore a valuable relief for those starting out in the theatre.
It was not appreciated at the time, although we consulted with the industry's tax working group, that the provision did not cover the position of actors who, rather than employ a traditional agent, preferred to get together with colleagues and to form their own co-operative agencies. We did not intend that group to be excluded. Indeed, they represent some of the newcomers to the theatre whom we particularly wish to help.
New clause 12 extends the relief introduced last year to agency fees paid to co-operative societies. The new relief will apply to fees paid out of earnings taxed under schedule E where a bona fide co-operative society acts as an agent in finding work for a theatrical artiste. Fees up to the 27 present limit of 17.5 per cent. of earnings can qualify for relief. On this occasion it seemed appropriate to back-date the new relief so that, as with the relief that we introduced last year, it will apply to fees paid after 5 April 1990.
§ Mr. Chris Smith (Islington, South and Finsbury)
We welcome new clause 12 and we will be happy to speed it on its way. We argued strongly during the Committee stage of last year's Finance Bill, and we argued strongly again this year in our deliberations upstairs, that the Government and the Inland Revenue were being unfair to actors, especially those who are just starting out in the profession in the switch from schedule D to schedule E consideration of their tax treatment which has taken place since last year.
As a result of our representations, and of those of the hon. Member for Beaconsfield (Mr. Smith) on behalf of actors, the Government have sought to make some ameliorations to the new tax regime to which new actors are subjected. Last year relief was introduced for the agents' fees that actors pay up to a percentage limit. This year, the Government have gone a little further and, with the small step in new clause 12, they are giving relief where the agency to which an actor belongs is a co-operative agency. It provides some additional and welcome relief.
However, the Government have not gone far enough and they have yet to address a number of specific issues. We want the Government to restore the position that existed before last year. When we take over on the Government Benches, we will do that. In the meantime, we want to raise two matters. The first is the touring allowances that are paid to actors, and the second is the audition fees that are paid by actors, both of which deserve better consideration. We hope that the Government will now use their breathing space to consider those two further items. Agents' fees are one thing and co-operative agency fees are another, and the new clause is a welcome step on those matters. We want the Government to take some more steps to restore the position for actors who are not only a hard-pressed profession, but who form part of our heritage and part of our distinctive cultural strength, which we must preserve at all costs.
§ Dame Elaine Kellett-Bowman (Lancaster)
I thank my hon. Friend the Minister for introducing the alterations that we sought from him last year. Will he join me in congratulating the founder of the actors' co-operative in Lancaster, Mr. Stephen Allen, who has just become this country's Mastermind?
§ Mr. Peter Bottomley (Eltham)
I join in welcoming the new clause, which was admirably moved by my hon. Friend the Financial Secretary. Most hon. Members will not take the threat of the hon. Member for Islington, South and Finsbury (Mr. Smith) too seriously because one of the groups who have prospered in the past 12 years of Conservative government have been people involved in culture, the arts and literature. However, we agree that the hon. Gentleman is right in saying that we have not gone far enough in restoring the position of young actors.
Will my hon. Friend take advice from our hon. Friend the Member for Richmond and Barnes (Mr. Hanley), who might be able to get together a group of leading actors who could speak not on their own behalf, but on behalf of the many hundreds of young actors who each year are in the position that they were in when they started? It might then 28 be possible to go further, either in terms of Inland Revenue procedures or in terms of next year's Finance Bill, so that new actors have the chance to come into the profession without adverse tax treatment.
§ Mr. Maude
I join my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) in her tribute to the new Mastermind, whose connection with the new clause I am glad to acknowledge.
I take the point of my hon. Friend the Member for Eltham (Mr. Bottomley. When we discussed the matter in Committee, I said clearly that I would consider carefully whether practical steps could be taken to meet the pressing anxieties especially of those starting out in the acting profession. That examination is under way and I will pursue it. I made it clear in Committee that I was by no means unsympathetic to the points that had been made.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.