HMRC internal manual

Employment Status Manual

ESM4126 - Particular occupations: entertainment industry - theatrical performers/artists - designers, directors and choreographers

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.

This is the main sectoral guidance for designers, directors, and choreographers (often described in the industry as ‘creatives’) who work in theatre, opera, dance and circus. Non-permanent directors who support the role of the director e.g. assistant directors, should also be assessed by following this guidance. This guidance has been designed in consultation with the sector as guidance for the employment status for tax purpose of theatrical designers, directors and choreographers.  It should not be read in isolation, but alongside ESM0500

Whether an individual is employed or self-employed depends upon the nature of the relationship with the person for whom the services are provided, considered in the context of their overall business and other engagements.  To decide whether someone is employed or self-employed you have to obtain all of the relevant facts relating not only to the particular engagement but also to the creative’s wider business and then interpret those facts in the light of case law. The written terms of a contract may not be decisive by themselves, the reality of the engagement must also be considered. To do this, as is the case with other professions, you need to consider how the designer, director or choreographer generally carries out their profession. ESM0500

In determining the status of a theatrical designer, director or choreographer, the pattern of their engagements, the extent of any supporting business structure and the level of control they have over their work will be particularly relevant as in the cases of McCowen and West v IRC and Fall v Hitchen, ESM4122

The following factors, when considered together in the round are broadly indicative of self-employment:

  • An itinerant pattern of work:
    • A number of engagements which may be consecutive or concurrent. ESM0548 and/or;
    • A number of different engagers e.g. a theatre producer, TV production company and film studio ESM0553
    • May have periods of unemployment between engagements. During these periods the creative may be undertaking activities relevant to their occupation including updating skills, obtaining materials, networking, etc.
    • The creative takes steps to build a business, beyond attending rehearsals and performances. The more steps the individual makes the more compelling this will be. Examples of typical activities could include use of an agent, membership of Equity or other representative bodies, professional training, networking, obtaining insurance and conducting research.
  • The individual has a high degree of control over the work performed. Designers, directors and choreographers are hired for their creative skills.  As such, the engager is likely to afford them a high degree of creative freedom. Whilst it is important whether the engager has the right to overrule or change what services are provided, when they are provided, how they are provided and where they are performed, even if they do not actually exercise that right, it is established by case law that the degree of control attached to the right has to be sufficient to create an employment relationship. In practice the work of a designer, director or choreographer is usually going to be highly collaborative and, therefore, in many cases not consistent with a traditional master-servant relationship. The relevant control is that over how the services are provided, ie the creative input in the designing, direction or choreography. In terms of control, the what, where and when are usually determined by factors external to the relationship between the creative and the engager, although, note that some roles e.g. designers, have a high level of control over where, when and how they produce their work. ESM0516
  • There is potential to incur a financial loss, for example the individual incurs costs associated with running a business including organising and obtaining work or they may have to spend more time than anticipated doing the work for the agreed fixed fee. ESM0541

Where these factors are largely absent, or reversed in the engagement you are considering, it may be one of employment.

A designer, director or choreographer may be an employee for the purposes of an engagement, regardless of the fact that they are self-employed in respect of other engagements.

None of these factors are determinative of status in themselves.  It is not, therefore, just a question of undertaking the mechanical exercise of running through items on a checklist to see whether they are present or not. All relevant factors relating to the way an individual is contracted should be considered including e.g. the length of engagement under the same contract. The right approach to assessing employment status is then to stand back and look at the picture as a whole to see if the overall effect is that of a person in business in his or her own account. ESM0556