BIM50160 - Actors and other entertainers: expenses
Actors, dancers etc who are engaged under standard contracts incur few expenses in the course of their work. This remains true even if the performer is taxable on the basis of their carrying on a profession (see BIM50151). The contracts usually require the production company to supply the costume, wigs, hairdressing and exceptional make up necessary for the role. In addition, the theatre management provides transport between theatres and rehearsing rooms and between tour venues. Payments may also be made to cover the actor’s travelling between home and the theatre.
Clothing
The general rule for clothing costs is set out in BIM37910 where the case of Mallalieu v Drummond [1983] 57TC330 is discussed. In Mallalieu, Lord Brightman explained that a self-employed person could not claim a deduction for the cost of ‘a wardrobe of everyday clothes’ even if they were used solely for work. There is an inevitable non-business purpose in the acquisition of such clothing: the provision of warmth and decency.
The Mallalieu decision does not mean that the cost of clothing is always disallowed. BIM37910 gives examples of the costs of a ‘uniform’ or protective clothing. The cost of clothing acquired for a role in a film, stage or TV performance is also allowable. The clothing is not part of ‘an everyday wardrobe’; it is ‘costume’ used in a performance.
Medical expenses
Health-related surgical, hospital and medical expenses are inadmissible deductions in computing profits (see Norman v Golder [1944] 26TC293). This will be so even if a reason for paying for private health treatment is to enable the performer to arrange the timing of treatment to best suit their business commitments.
Only in exceptional circumstances will non-health related operations to change personal appearance by reversing or masking the advancing of the years (for example, face-lifts) not have a private purpose. You should invite the Tribunal to infer the existence of a private motive unless there is compelling evidence to the contrary.
Where a performer claims a deduction for the cost of cosmetic surgery to correct some perceived inadequacy in their appearance then you need to examine whether one of the purposes in incurring those costs was to gratify their private wish to improve/change their appearance. If it was, no deduction will be due. Some performers may, however, be able to show that expenditure on cosmetic surgery has been incurred solely for professional purposes. Such expenditure may be allowed.
Example
A radio performer of many years experience starts to do TV work. The performer is advised that their irregular teeth are reducing opportunities to appear on TV. The performer consequently elects to have cosmetic dentistry. It is established as fact that the performer had been content with their appearance, and the TV work was the sole purpose of the dentistry. The cost is allowable.