The potential £33m NI bill now facing UK orchestras (p1) has shaken the entire sector. Financial stability has long been an elusive goal for many orchestras, which by their very nature, incur high costs and generate uncertain revenues: so when the ABO says that the NI demand could sink as many as 80% of the country?s orchestras, it is not exaggerating. However, the whole issue begs a series of very uncomfortable questions of both the sector and HMRC.
Firstly, when the NI rules changed in 1998 and again in 2003, were the sector?s finance managers, trustees, accountants and indeed auditors not warning orchestras of the impending doom? Surely any auditor, examining accounts with payments to freelance musicians running into the hundreds of thousands of pounds, should at least have studied the implications of the new NI regulations and how they would be applied? Secondly, to what extent did HMRC fulfil its moral responsibility to poorly paid musicians by consulting with ? or even informing ? the ABO or the Musicians Union (MU) when its 1998 changes were introduced, or even when the rules were changed five years later (orchestras are specifically mentioned in the guidelines)? Thirdly, the MU, which is standing side-by-side with the ABO in trying to resolve the mess, has argued that, unlike actors, musicians are seldom in a position to claim Jobseekers Allowance, and therefore ?the benefits of paying Class 1 National Insurance are lost to the individual musician?. This argument implies that we should all pay only those taxes which offer a direct benefit in return ? a principle which, if applied universally, would prevent most taxpayers? money being spent on funding orchestras. And finally, the question of who leaked the details of the orchestras? NI problems to the BBC must be the subject of much speculation among ABO members. Whoever it was has done them a disservice. Whilst there was always the potential for politically-driven deals to be done behind the scenes to resolve the situation, it will be much more difficult to achieve a satisfactory outcome under the full glare of the media spotlight and the disapproving eyes of millions of taxpayers.
Liz Hill and Brian Whitehead, Co-editors