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HMRC internal manual

Business Income Manual

Actors and other entertainers: profession or employment

Actors, ballet dancers, opera singers, musicians and other performers and artists who appear live in the theatre, opera, ballet, or in clubs, or perform in film, video, radio or television productions may be engaged under either contracts for services, the profits of which are taxable as professional profits, or contracts of employment, income from which is taxable as employment income.

There are a number of standard contracts commonly used to engage performers and artists in these industries. These contracts incorporate a comprehensive range of standard terms and are the result of negotiations between bodies representing engagers and performers/artists in the industry. They are often referred to by reference to the union which has negotiated on behalf of the performers, and accordingly there are a range of contracts known for example as standard Musicians Union contracts and standard Equity contracts. The British Actors’ Equity Association is the trade union which represents most performing artists other than musicians.

The unions have been able to secure a package of measures designed to protect their members such as:

  • minimum rates of pay,
  • overtime, bank holiday and Sunday premiums,
  • agreed rates of touring and subsistence allowances,
  • holiday pay,
  • agreed disciplinary procedures.

Because these features are more commonly found in an employer/employee relationship, it is natural that an examination of the standard contractual terms may lead to the view that performers/artists so engaged are engaged under contracts of employment. And in the case of Fall v Hitchen [1972] 49TC433, it was held that a ballet dancer engaged under a standard contract was engaged under a contract of employment.

However in 1993 two actors, Alec McCowen and Sam West, appealed to the Special Commissioners, and successfully argued that their income from standard Equity theatre contracts was not employment income. The decisions were given in public and accordingly they can be openly referred to, but they are not binding on the current tax Tribunal. The Revenue did not pursue these cases to the High Court.

It is clear from these contrasting cases that the terms of the contract may not be decisive by themselves, and in the case of artistic workers, such as theatrical performers/artists, the way in which they generally carry on their profession also needs to be considered.

In Fall v Hitchen, Mr Hitchen was engaged for a minimum period of something like six months `to rehearse, understudy, play and dance as and where required by the Manager’. Both Mr West and Mr McCowen, however, were engaged to play a specific role in a specific play for the run of a play, or a shorter fixed period. And both Mr McCowen and Mr West had a variety of engagements in different media (film, television, radio and theatre), consecutively and sometimes concurrently.

The type of engagement undertaken by Mr McCowen and Mr West is now much more typical of the profession than that undertaken by Mr Hitchen in 1969. These days it is comparatively unusual for a performer/artist to be engaged to play parts as and when cast in a series of different plays or other productions. The typical performer/artist is likely to have a whole series of separate engagements in different media making up his professional working life, commonly interspersed with periods without paid work, between the end of one engagement and the commencement of another.

Other case law supports the view that, for theatrical performers/artists, independence from a particular regular paymaster may indicate that individual contracts are not contracts of employment, even though the initial view based on the particular terms of the particular engagement may suggest otherwise.

Accordingly, performer’s/artist’s earnings will be liable as the profits of a profession in many cases. The sort of engagement where an employment and PAYE may be appropriate, is more likely to be in circumstances where a performer/artist is engaged for a regular salary to perform in a series of different productions over a period of time, in such roles as may be from time to time stipulated by the engager, with a minimum period of notice before termination of the contract, as was Mr Hitchen in Fall v Hitchen. This would apply for example to permanent members of some orchestras and permanent members of an opera, ballet or theatre company. An employment and PAYE would apply in these cases regardless of the receipt by the performer/artist of other income correctly chargeable as profits of a profession.

There is more information about the basis of charge for particular types of work in the entertainment industry at ESM4100.

The NIC treatment of entertainers is sometimes different from that which applies for tax. See Revenue and Customs Brief 19/12 at .