Beauty and the tax Beast: There is no happy ending while the Inland Revenue plays the leading role, says Neasa MacErlean

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CHILDREN watching this evening's opening night performance of Beauty and the Beast in Westcliff-on-Sea, Essex, will be unaware of a drama unfurling backstage. Like many young actors and actresses, the cast are consumed with anger at the Inland Revenue's practice of taxing them as if they were permanent employees.

Actors, they believe, are being driven out of the theatre because they cannot claim tax relief on their frequently considerable expenses.

Next year the actors' union, Equity, will take on the Inland Revenue in a test case over actors' expenses. But actors believe that even if Equity loses the case before the commissioners, the Revenue will not make any sudden Beast-like change. The case could well end up making its way to the House of Lords over a period of several years. (The Labour Party is committed to restoring actors' right to claim expenses).

Richard Hodder, who plays Beauty's father in the pantomime at the Palace theatre near Southend, said he had to subsidise his expenses out of earnings because of the tax rule. He gets pounds 48 per week for expenses - an amount that is taxed by the Revenue as if it were salary. After the deduction of 25 per cent tax, he is left with pounds 36 - pounds 2 less than the pounds 38 needed for lodgings each week during the panto's two-month run.

Mr Hodder expects a happy ending only on the stage, where his character becomes Chancellor when Beauty and the Beast get married: 'You may rest assured that Never Never Land won't have such an iniquitous state of affairs when I've finished with it.'

But for the time being Equity is thoroughly depressed with the new interpretation of the law, which the Revenue imposed on actors in April 1990 and which caught many other actors who began their careers after 1987. New actors who began to tread the boards after that date were treated as if their theatrical contracts were contracts of employment: they were put on to PAYE. Actors in TV, radio, cinema and other sectors are still allowed to pay tax under the more favourable self-employed status of Schedule E - as are theatrical actors who began their careers before 1987.

If actors earn all their income in the theatre they will not be able to claim tax relief on any of the outgoings that are often vital to their development - Equity membership, make-up and hairdressing, tuition and coaching, photographs, theatre and cinema tickets, scripts, mail and postage . . . The list goes on. Actors like Richard Hodder who make only some of their income from the theatre will have to suffer the complexity of being on both Schedule E and Schedule D and of having income assessed on both a current year and a preceding year basis.

He said: 'Nobody is worried about paying tax. But we need the allowances because, although it's a glamorous profession, it ain't well paid.' Many of the Beauty and the Beast cast will be on the Equity minimum of pounds 154.35 per week. Chris Dunham, artistic director at the Palace, said the tax issue was a constant source of discussion and irritation backstage: 'It's terribly unfair. The most unfortunate are the lowest paid - and they are the ones who are being clobbered.'

But before the last performance of Beauty and the Beast on 6 February, Equity hopes to have taken its first step in the battle with the Revenue. Three actors - including a household name - have put themselves forward as guinea pigs in the test case. Their identities will be revealed when the case is heard before the commissioners, in January or some time in the spring.

Maybe then the actors will be on the long, winding road to a happy ending.

(Photograph omitted)

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