Question
Greta is an award-winning interior designer running a business in London. In January 2022, she was approached by a TV company to run an interior
Greta is an award-winning interior designer running a business in London. In January 2022, she was approached by a TV company to run an interior design show. This will have an impact on her ability to run her business as she will be employed by the company and only run the business part-time, but they have given her an offer too good to turn down. Filming for the first series is due to commence in August and she approaches you for advice on the tax implications of the deal before she signs it. She sets out some of the terms below:
1. Beyond her salary as an employee of the TV company, she will be paid 1million to ensure that she does not make any programmes for other broadcasters in the UK.
2. She was about to launch a range of designer homeware products that she had designed herself. The TV Company has requested that the new products be delayed and launched when the show is ready to air in Spring 2023. The products will then be launched in connection with the show. She has been paid 100,000 in recognition of the loss she will suffer as a result of not launching her range of products as scheduled.
3. She has spent 85,000 on a new wardrobe to fit her new role as a TV presenter. She has "invested" in designer clothes and accessories.
4. She has been provided with tickets to all the major social gatherings in London including football tickets, Chelsea Flower Show tickets and Wimbledon tickets. The cost of providing tickets is 7500.
5. Her employer also paid for her to join an exclusive members club in London in order to socialize with potential clients. Membership of the club costs 100,000 a year and she would never pay for it herself but is now happy to have it since it is paid for by her employer.
Advise Greta on the tax implications in the circumstances.
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