Is Bill Clinton A Comic Or A Statesman?

by Jason Gorringe, Tax-News.com, London

14 June 2001

If you're an international entertainer or sports star, one of your main preoccupations, or at least your accountant's main preoccupations, is battling with the forest of rules about taxation of your earnings as you globetrot. Where do you reside? Where did you make the contract to perform? Who made the contract? Where did you get paid? Who got paid? Is there an applicable double-tax treaty?

There are plenty of special rules covering sportsmen and entertainers - it's just a question of knowing about them. But what if you're a politician? This month a Yorkshire accountant had to decide whether or not to tax the earnings of well-known stand-up entertainer ex-President of the US Bill Clinton.

So Mr Tim Parr, accountant and tax adviser to the International Business Convention in Harrogate, which has previously been addressed by such luminaries as President F W de Klerk of South Africa and Henry Kissinger (definitely not an entertainer), asked the Inland Revenue what to do about the lecture fee, thought to be £100,000. As a fee paid to an entertainer, it would be liable to withholding tax at 22%. But do you tax a statesman?

On the very day of the Convention, after four weeks of reflection and mounting tension in Harrogate, the Revenue spoke, or rather faxed its pronouncement, on a standard form used to cover entertainer's earnings:

Artiste's Name: William Jefferson Clinton, it said;

Stage Name: Bill Clinton;

The form, signed by S R Robinson, H M Inspector of Taxes, lamely concluded: 'Basic rate withholding tax not appropriate'. So Slick Willy isn't an entertainer after all. Or is it the tax treaty?

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