ESM4136A - Particular Occupations: Entertainment Industry: TV and Radio Presenters: Factors in Determining Employment Status for Tax: Other indicators: In business on own account and economic dependency

A way of thinking about some aspects of the third stage of the employment status for tax purposes test is to consider if the presenter is ‘in business on their own account’. This is an assessment as to whether they are operating an independent business separate from that of their engager or broadcaster and the engagement is part of that business.

It can be relevant to consider whether the presenter operates and maintains a business establishment in order to win work and market themselves within the same profession.

Example

In Hall (HM Inspector of Taxes) v Lorimer. [1993] BTC 473, Nolan LJ suggested that in considering whether one was an employee or in business on one’s own account:

“The extent to which the individual is dependent upon or independent of a particular pay master for the financial exploitation of his talents may well be significant”.

In Hall v Lorimer, [1992] STC 599, at 612f, Mummery J considered that the “continuity of a relationship” could be an indicator of employment status and this view was not doubted by the Court of Appeal.

In the recent UT decisions for Christa Ackroyd Media Ltd and Kickabout Productions Ltd the tribunal considered the extent to which the presenter relied on the engager for their living.

Where there are a number of engagements of a limited duration with different engagers over a period of time this may indicate that the presenter is operating as a business. Such an indication should be considered when looking at the overall picture.

If there are other engagements, it will therefore be relevant to consider whether the activity is part of, or an extension of, the same business or closely related (see below ‘work of a similar nature’) and the number and/or relative value of other engagements.  See ESM7160 and ESM8590

When considering the number of different engagers and engagements see ESM4136F

In Christa Ackroyd Media Ltd and Kickabout Productions Ltd arguments about the business activity prior to the engagement were considered but were not relevant. In those cases, the tribunal directed itself to consideration of other business activity in the same period in order to consider the extent to which the presenter was dependent on the one engager. In Atholl House Productions Ltd, the Court of Appeal advised that it is a relevant fact, if known or reasonably available to the putative employer, that the individual performs similar services as an independent contractor, but it goes no further than that.  

The Court of Appeal in Atholl House also advised that the focus should be upon the particular engagement entered into, with the terms of the hypothetical contract remaining central to the status decision.

It can also be relevant to consider the extent to which the presenter is restricted by exclusivity clauses if they cause them to be significantly dependent on one particular engager.

Covid-19 crisis and the impact on business

It is important to recognise that during the Covid-19 pandemic a presenter may have had fewer engagements during this period. This is not something that should be argued as being a relevant factor.

Considering work of a similar nature for other engagers

Working for other engagers performing work of a similar nature can indicate a presenter is in business for themselves. It can show a business structure exists and the individual is not solely reliant on one engager. For some further information on this concept see ESM0549

A presenter can be employed for one engagement and self-employed for others. Having some employed work does not prevent other engagements from being self-employed or vice versa.

A presenter can also perform work of a different nature for different hirers. Those who are self-employed typically exploit their particular skills and expertise on a specific type of work. A presenter doing work for multiple engagers, exploiting the same skills and expertise, can be more indicative of self-employment.

The courts have not provided a definitive percentage of income or number of engagements that is considered to be relevant. It is a question of looking at the available facts and using these to form an overall judgement about whether the engagement is part of a larger self-employed business. The greater the similarity and alignment between the engagement and the larger self-employed business the greater the likelihood that it is part of that business. 

An example might be a restaurateur appearing as a guest chef on a magazine show. The subject matter of the engagement and the business are similar (cooking).  Whilst aspects of the engagement is different (presenting, running a kitchen), the engagement is aligned to the business and the individual’s expertise, as it is essentially promoting that business.   Looking at the wider context, the appearance probably does form part of the restaurateur’s larger business.

What is important in this example, is not that the person is an expert per se but that the work is a continuation of or natural extension to their existing business activities (almost all presenters are expert in something). So, for example an ex-footballer is not continuing their ‘business’ as a footballer by presenting a programme about football but other presenting work, or other activities relating to football punditry would be accepted as being in the same sphere of activities as the original presenting programme. See ESM7160

For other factors you may need to consider see ESM4136