Changes to National Insurance rules, introduced in 1998 to benefit freelance “entertainers” by increasing the NI contributions payable by their employers when they are in work and therefore be eligible to claim jobseekers’ allowance when not, are now plunging the country’s orchestras into crisis. The reform was in fact designed to benefit ‘resting’ actors, but it is hitting the employers of orchestral musicians as well.
These liabilities were only spotted a few weeks ago, and Michael Henson, chair of the Association of British Orchestras, has duly written to Tessa Jowell, secretary of state for culture, media and sport, to say that there is a “potential crisis facing the entire orchestral sector”, and that the backdated tax bill they face as a result of some £33m is “so vast many orchestras would close”.
According to a report in The Guardian today, “many orchestras, including the LSO and the Philhamonia, are composed entirely of self-employed musicians”, and in the case of the latter, for instance, “it could mean an extra £500,000 on their tax bill per year. The LSO arrears, meanwhile, would amount to some £8m.
HM Revenue and Customs (HMRC) recently conducted an enquiry into five sample orchestras to assess the impact of the legislation on them, and found that “making the full payments would result in four out of the five going into liquidation.”
Presumably, too, the legislation therefore applies to pit musicians, too, for West End musicals; it will be interesting to see how this (literally) plays out….
Is this another reason for the rise of "virtual" orchestras and reducing their numbers? To stop having to pay NI (since machines don't need jobseekers allowances!)?