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Self-employment: A1 Forms

Volume 836: debated on Monday 12 February 2024


Asked by

To ask His Majesty’s Government what steps they are taking to improve the provision of A1 forms, in particular for self-employed workers in the music industry touring in the European Economic Area.

My Lords, HMRC is rolling out significant improvements to the application process by allocating extra resources to help answer phone calls and deal with correspondence across all national insurance services. That includes the training and deployment of more people to process A1 applications. HMRC has also introduced new digital A1 certificate application forms and will roll out automation technology to help process customers’ applications faster.

My Lords, as the Minister will be aware, concern is such that both LIVE and the Independent Society of Musicians have written to the Treasury about this issue. I appreciate that there is a recovery strategy but, as the April deadline approaches, there has been no noticeable improvement. Many musicians and crew are receiving their forms after a tour has ended, meaning that money is withheld, potentially permanently. Ultimately, the Treasury will be the loser. Will the Minister agree to meet Peers and interested parties to talk about this? I hope she agrees that that might be helpful.

I am grateful to the noble Earl for raising this issue. I reassure him that my inquiries in the Treasury have caused one or two minor waves in ensuring that this gets the priority that it needs. There has been an improvement, although I accept that it is not good enough—as HMRC also acknowledges—and that more needs to be done. I will take away his request for a meeting. Although I am of course happy to meet him, the subject is not directly within my portfolio, so it might be better if the relevant Minister met him.

My Lords, the news that the Treasury will speed up the process for these forms is welcome for touring musicians, but there are other limitations stifling a thriving live music sector that the Government could take action on. For example, can the Minister confirm whether the Government will commit to the permanent retention of the 50% orchestra tax relief rate?

The orchestra tax higher rate has been extended to the end of the 2024-25 tax year and then a taper will be put in place. It is worth noting that the orchestra tax relief has been worth £62 million since 2016. Obviously, the Treasury keeps taxes under review. I note the noble Lord’s comments.

My Lords, as the singer Rachel Nicholls has documented, the problems over visas for musicians and singers are now compounded by the fact that foreign opera houses and festivals are beginning to boycott British artists. Has the Treasury made any assessment of how these post-Brexit arrangements are affecting the economy, and if not, please can it do so?

I know that obviously the DCMS and colleagues across government are working very closely with the EU and indeed with individual member states to support musicians, and 23 out of 27 member states have clarified their arrangements or introduced easements to allow visa or work-permit-free routes for short-term touring. France, Germany and the Netherlands have all stepped up early on in the process, and Spain recently changed its requirements after intervention from His Majesty’s Government. Obviously, we will continue to address challenges where we see them.

My Lords, 20% of orchestras’ earned income comes from touring, mostly to countries in the European Economic Area. The Government’s plan to remove orchestra tax relief completely from performances in the EEA will have a hugely damaging effect on the viability of such touring, making it hard and, for some orchestras, even impossible to continue to tour in Europe. Will the Minister and her colleagues look again at this proposal and, if it cannot be scrapped, what support might the Government offer to orchestras to help offset the income they will lose and to enable them to continue to tour in Europe?

It is not entirely right that costs incurred in the EEA should be offset against UK tax; that would seem slightly odd. However, I reassure the noble Lord that of course some of the costs will be tax deductible: for example, if a group were to hire a conductor from the US and use that conductor for performances in the UK. Obviously, we have to make choices in this area. We are content with where we are headed in terms of removing EEA activity from the orchestra tax.

My Lords, the A1 form is required for each travelling worker, for each trip and for each EEA country they intend to visit. Industry bodies tell us that this represents a significant burden for their members, particularly for those who are self-employed or work for small organisations. Given that HMRC processes are increasingly digitised, do the Government believe that there is scope for simplifying the application process, such as moving from paper to digital certificates, or allowing people to use previously completed applications as a template for their next submission?

The certificates are a slightly different issue because of course that will depend on the overseas countries accepting a digital form, which I suspect may be slightly more challenging. Where that is possible we will look at it, but we are now focused on ensuring that the processes are sped up. It is important that we get the automation in but it cannot be done end to end, as in some cases one needs caseworkers’ judgment to issue the A1 certificate.

My Lords, the noble Earl, Lord Clancarty, raised the issue of the April deadline and making sure that the applications are available—the A1 form as well as the certification. What advice can my noble friend the Minister give to those who do not receive their forms in time, or maybe receive their form electronically but do not have the necessary certification? What leeway will be given to those individuals?

The A1 certificates are issued all the time. As the noble Lord, Lord Livermore, pointed out, in many cases a worker needs a certificate for every time they go to a certain country, because of course the circumstances may change. However, in other cases, forms can be valid for up to two years. Therefore there is not an April deadline per se. The April 2024 date is when HMRC expects to be processing back to its normal target arrangements.

My Lords, I declare an interest as my son is a rock musician. Does the Minister agree that the provision of music, particularly rock music, is something in which Britain has a comparative advantage? Does she also agree that, for all its benefits in other areas, Brexit has unambiguously increased the barriers to trade in this area?

I absolutely agree with the noble Lord that the UK has one of the finest music industries in the world, which of course includes rock music but also classical music and opera. It is the second-largest recorded music market in the world and contributes £6.7 billion to the UK economy. Brexit has meant that there have been changes to certain arrangements. However, the A1 form process has remained relatively stable for many years.

My Lords, as Brexit has been mentioned, I point out that many Members of the House still here will, like me, well remember the early days of the Beatles. They will remember that the Beatles managed perfectly well in Hamburg for many months, if not years, without any great difficulty. That was before the EU was even thought of. Can the Minister consider ways in which we can learn from this by contacting Paul and Ringo to see how they managed that?

The Beatles split up the year I was born so I do not have as long a memory as the noble Lord. However, the Government are very focused on developing our emerging artists and ensuring that they can get to new international markets, whether that be in the EU or beyond. The music export growth scheme has been tripled and will now spend £3.2 million over the next two years to support these emerging artists. When it comes to music, we are talking about not just the EU but the entire world.

My Lords, does my noble friend the Minister agree that this is not a problem of Brexit but a problem of EU members not being co-operative?

My Lords, I had not expected this to get into a Brexit ding-dong per se. The UK was more ambitious than the EU when it came to negotiating the trade and co-operation agreement but some of our proposals were rejected. I note that the TCA is reviewed every five years and, while I would not want to comment on the scope of that review, there may be opportunities in the future.