ESM4139A - Particular Occupations: Entertainment Industry: TV and Radio Presenters: Factors in Determining Employment Status for Tax: Examples for radio presenters- Radio presenter, example 1

Key Facts

Harry is a presenter of a live radio show on sport and engaged by OOS for a one-year contract. The show is on air every weekday and is usually broadcast from the studio or from other locations and stations as agreed between the station and Harry. Harry is also required to record a short introduction for a podcast which covers highlights of the day’s show. Harry is contracted to work for a minimum of 220 days per year and must provide his personal service. Harry cannot provide a substitute.

Harry is an experienced presenter and the station does not interfere with the content of Harry’s show which is largely improvised, but Harry’s contract stipulates that he must comply with legal and regulatory requirements, including codes of practice and guidelines.

The show time is fixed in the contract and the engager cannot move the show time without Harry’s agreement. Harry can prepare and rehearse at a time to suit him.

Harry can provide his services to another engager, except any services that are similar to the ones he provides for this show in the same transmission area and would compete with his show and / or the station. Harry has an agent and is building a broadcast portfolio with engagements in other areas and on television; he has obtained some work through marketing on social media. He has some other work as a presenter during the period in addition to this engagement. The radio show forms an important part of his income over the year. Some months it is 20%, some months 70%.

The engager has the right to immediately terminate the contract if Harry brings the engager into disrepute.

Harry does not have management responsibilities or staff benefits.

Outcome – Harry is Likely to be Employed

Mutuality of Obligation ESM4133

There is a contract with the engager for work in return for payment. There is an obligation to provide work for the contracted days. There is a work/pay bargain. Other factors then determine whether that is a contract of service or for services.

Personal Service ESM4134

Harry is personally required to provide the services. The condition for personal service is met.

Control ESM4135

The essential question is whether there is a “sufficient framework of control” (Briggs J in Montgomery v Johnson Underwood [2001] ICR 819) for the contract to constitute a contract of employment.

In Ready Mixed Concrete, MacKenna J said of the test of “control” at 515F: “Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it, the time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient degree to make one party the master and the other his servant. The right need not be unrestricted. “

Control - When and where ESM4135C and ESM4135D

Harry has some say over where he works. The show has to be recorded in the studio and the times are specified but that is agreed at the outset and not changed without Harry’s agreement.

Control - What and How ESM4135A and ESM4135B

Although Harry is a trusted professional and OOS rarely or never interfere with his presentation of the show, the OOS contract gives them an ultimate right of control over content and over what Harry does. Harry is required to ensure the show meets the station’s obligation to keep to the Ofcom rules for this type of show. The extent of that right of control can vary depending on the different Ofcom rules for a particular genre (for example news is quite strictly controlled) but what is significant here is that even for a sports show, and the control may be quite narrow, OOS has the ultimate right to control how the task is performed.

The engager has some control over Harry’s availability to work elsewhere. The more the person is effectively constrained from continuing their wider business, the stronger the pointer towards employment. A clause restraining trade in a local area only, is less control than a clause restraining trade nationally. However, even limited non-competition clauses restraining who he can work for is inconsistent with someone being in business on their own account and more consistent with employment.

The framework of control over the content of the show “the how” and the restraint on trade is a framework of control more consistent with an employment than self-employment.

On balance, the tests of mutuality and control point towards employment but other factors should also be considered to see whether they are inconsistent with that conclusion.

Other factors ESM4136

In Weightwatchers (UK) Ltd and others v HMRC [2011] UKUT 433 (TCC) Briggs J suggested that when considering whether the factors of a contract are consistent with employment one does not start from a “standing start”. If as in Harry’s case, there is a right to personal service, mutuality of obligation and sufficient control to be consistent with an employment contract then there would have to be other factors sufficient to displace the finding this was an employment contract.

In Harry’s case there are no factors sufficiently inconsistent with an employment relationship. None of the factors below is so inconsistent with employment that it would indicate someone in business on their own account. ESM4136A

Exclusivity ESM4136B

Harry can provide his services as a presenter for others without permission from the engager, but this is likely to be refused where it is in direct competition. A right to restrict his availability to work for others points away from him being in business on own account. The greater the restriction on Harry’s freedom to work for others, the stronger the pointer towards employment. However, HMRC considers that even a fairly narrow restriction on a person’s freedom to contract with others is inconsistent with self-employment.

Financial risk ESM4136C and ESM4136D

There is limited financial risk. Harry is paid for a fixed number of days per year under the contract. Harry does not have any equipment of his own that he would need to maintain. The contract is for a year. In the similar case Kickabout Productions Limited v HMRC [2020] UKUT 0216 (a two-year contract which was then renewed) the Tribunal rejected the idea that the taxpayer with a degree of continuity in the employment relationship had any material financial risk. In considering similar media contracts that could expire at the end of a year is inconsistent with an employment.

Length and pattern of engagement ESM4136F

Harry is engaged to provide his services for one year, which can only be terminated if there is a material breach. Although the length of engagement is generally neutral, longer engagements like this tend to be associated with other factors (stronger control/ dependency / lower financial risk) that point towards employment for tax. By contrast a short engagement with other factors such as an itinerant pattern of work with multiple clients for whom they do similar presenting work tends to point towards the person being in business of their own account.

Harry is paid per show and is contracted for one year with a minimum number of shows. In recent Upper Tribunal cases such as Christa Ackroyd Media Limited and Kickabout Productions Limited, the Tribunal has had regard to the extent to which the presenter is dependent on the engager for their living.

Harry is reliant on the engager for a significant part of his income for a year. This is not a question of knowing a percentage of the income but part of an impressionistic consideration of whether the worker is economically independent with a business establishment and outlay that would be inconsistent with an employment. An example of where that would be the case is at ESM4139E

For other examples of radio presenter roles see ESM4139