ESM4139C - Particular Occupations: Entertainment Industry: TV and Radio Presenters: Factors in Determining Employment Status for Tax: Examples for radio presenters- Radio presenter, example 3

Key Facts

Omar is engaged to present a live show for a broadcaster on a Sunday (10.00am to 2.00pm) for which he is paid an agreed fee per show. This is an engagement for 8 shows. The shows are aired from the broadcaster’s studios. Omar must provide his personal service for each show and cannot provide a substitute.

Omar originates ideas for the show and broadcasts live, unscripted. Omar drives the pace and direction of the show.

There is no show producer and Omar has full technical control of the programme. Omar must comply with legal and regulatory requirements, including codes of practice and guidelines. Omar cannot be moved to any other work.

This is a music led show. The genre of music that can be played on the show is determined by the licence format. The licence to broadcast specifies the type of music the station must play and so the presenter/DJ must play that type of music only. They have no discretion.

Whilst Omar exercises a great deal of control when performing the task, an ultimate right of control lies with the station.

Omar can provide his services to other engagers, except any services that are similar to the ones he provides for this show on a weekend.

Omar can work for a competitor station but cannot work on a show like the one he presents for the engager. Omar also works for other radio stations out of the area, on a talk show and acting as cover presenter for music shows. These are often short engagements. He also has a related business appearing as a host and entertainer at live events where he plays his and other music. This work involves playing music and entertaining for a fee. Omar is not economically dependent on the 8-show engagement and has to seek lots of other similar presenting work in order to earn his living.

The engager has the right to terminate the contract immediately if the presenter brings the engager into disrepute but has no right to sanction the individual for public statements or behaviour.

Omar incurs substantial expenditure in the course of obtaining his work and as an incident of carrying this out, for example, Omar has a promotional website which he had professionally designed costing thousands of pounds. Omar also has a home office and unreimbursed vehicle costs. This business outlay amounted to one third of his turnover. This is different in nature and scale from the costs incurred by an employee.

Outcome – Omar is likely to be self-employed

In this example there is right to personal service and sufficient control for the first two conditions in Ready Mixed Concrete (South East) Ltd v Minister of Pension and National Insurance [1968] 2 QB 497 (515C-D) to be met. However, this case is a short contract and suggests an itinerant pattern of working, with a series of short engagements together with evidence of expenditure to generate those contracts points away from employment. Because the engagements are short the level of commitment to any engager is low. This combination of short contracts and business expenditure points away from employment.

Mutuality of Obligation ESM4133

There is a contract for work with the engager in return for a payment. There is a work/pay bargain as there is an obligation to provide work for the contracted day.

Personal Service ESM4134

Omar is personally required to provide the services and so this condition is met.

Control ESM4135

Omar has to attend the radio studio to broadcast the show at the times specified by the broadcaster. Omar has some autonomy over the contents of the show and can choose some of the playlist but there is a sufficient scheme of control in place. The format is determined for him although, as a professional he is trusted to exercise a high degree of control and judgement whilst performing the task –choosing some of the playlist. This was one of the factors considered relevant by the Upper Tribunal in Kickabout Productions Limited v HMRC [75-81]. Omar also must comply with the legal and regulatory requirements. On balance there is a sufficient framework of control to meet the second test of sufficient control from Ready Mixed Concrete.

Other factors ESM4136

Exclusivity ESM4136B

Omar can work for competitors as a radio presenter (provided it is not on a similar show which competes with this show for the engager) and is free to engage in other work without approval, as long as it doesn’t interfere with this engagement. Although this contract only covers one session a week, Omar has similar work elsewhere in the same field and is not dependent on this engager. The restrictions on his external activity are a pointer away from self-employment but because they are so short in duration, they are not extensive enough here to provide much impediment.

Financial risk ESM4136C and ESM4136D

There is some financial risk here that is different from the longer contract examples. With a number of contracts of such short duration, Omar has financial risk associated with having to generate a series of contracts, and incurring unreimbursed expenditure. Minor expenditure on small items or travel does not entail significant business risk but in the case of Hall v Lorimer, expenditure incurred that was a third of turnover was held to be significant.

Length and pattern of engagement ESM4136F

Because it affects other factors such as risk and he can trade with minimal restriction, this is effectively the most important factor in this case. Omar is engaged for 8 shows to provide his services. Although the length of engagement is generally neutral, very short engagements means that the parties have very little commitment to each other, and this tends to point away from employment. Although short contracts on their own can be employment contracts, the worker also has to have some significant business expense needed to generate the series of contracts.

Re-engagements ESM4136F

People with short engagements like this may be re-hired. If they are re-hired that may also be a self-employment. However, some care is needed if this is continuous, regular or further to umbrella or overarching agreements with a legal commitment to further work

For other examples of radio presenter roles see ESM4139