ESM4139B - Particular Occupations: Entertainment Industry: TV and Radio Presenters: Factors in Determining Employment Status for Tax: Examples for radio presenters- Radio presenter, example 2

Key Facts

Alina is a radio presenter working for OOS. Alina is engaged to present a live show (daily 10.00 am to 1.00pm). Alina has a 9-month contract to deliver 180 shows during the year and is paid a fee per show, there is no obligation to re-engage for future work. Alina must personally provide the service and must notify the engager if she is unable to present a show.

Alina performs the show at the broadcaster’s studios, she plans and creates content for the show, providing audio links for a music led show and to deliver commercial reads as required by the engager’s advertisers. The radio station sets the framework for the show e.g. the target audience, music selection, timing and duration of ad breaks and news.

The contract provides for Alina and OOS to meet at a mutually agreed time and place to discuss broadcasts and their impact on ratings. The meetings give an opportunity for OOS to provide feedback and for Alina to suggest alternative ways to do the show.

Alina must comply with legal and regulatory requirements, including codes of practice and guidelines. The show has a set format and style which Alina will need to follow. Alina cannot be moved to any other work.

Alina has an entertainment business, but this engagement provides her with 50% of her earnings and is her largest engagement. Alina is prevented from working for specific named competitors as a radio presenter, but she is free to engage in other work without seeking approval as long as this does not interfere with the performance of the agreed services. The clause covers the broadcast area. Alina does have one-off engagements/appearances. The engager has the right to immediately terminate the contract if the presenter brings the engager into disrepute.

Alina does not have management responsibilities or staff benefits.

Outcome – Alina is most likely to be Employed

Mutuality of Obligation ESM4133

Alina has 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

Alina is personally required to provide the services. This condition is met. (Note that on the rare occasions HMRC sees substitution clauses in presenter’s contracts that right is usually fettered in some way – often the engager reserves a right to choose the substitute or reject them and to require personal performance from the presenter.)

Control ESM4135

Control - What and How ESM4135A and ESM4135B

Because the station has the right to enforce that Alina must comply with legal and regulatory requirements, including codes of practice and guidelines there is a sufficient framework of control in place, consistent with an employment.

Control - When and where ESM4135C and ESM4135D

There is some right of control exercised over when and where the work is carried out in that it must be performed at the studio but little beyond this.

The control over who else Alina works for is a significant interference with her ability to earn her living. Restraint of trade clauses point away from a person being in business on their own account.

The greater the restriction on Alina’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, like this one, is inconsistent with self-employment.

Other factors ESM4136

These are mainly consistent with an employment relationship. None of the factors below are determinative on their own – what is important is to use them to paint an overall picture and determine if they are inconsistent with employment and indicate someone in business on their own account.

In business on own account and economic dependency ESM4136A

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. Alina has an entertainment business and provides her presenting services for live events however, the income from this engagement forms more than 50% of her income stream and is more significant than any other work she does. With more than half of her income from this engager and the engagement being for much of the year, she is economically dependent on this engagement and engager. 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.

Exclusivity ESM4136B

Alina cannot work for specific named competitors as a radio presenter in the local area but is free to engage in other work without approval, as long as it doesn’t interfere with this engagement. The provision in the contract of this clause may restrict Alina’s ability to build a business on her own account, each case has to be considered on its own facts.

Financial risk ESM4136C and ESM4136D

Alina does not use any of her own equipment as the programme is broadcast from the radio studio, therefore she has little or no financial risk for this engagement. Alina is paid per show, but her contract is 9 months long – so she has little financial risk. If she does not work she is not paid.

Length and pattern of engagement ESM4136F

Alina is engaged for 9-months to provide her services. Although the length of engagement is generally neutral, longer engagements like this tend to be associated with other factors, such as greater restraint of trade, reduced opportunity to build business on own points towards employment for tax. The longer the engagement, the more control is exercised on the relevant days. Alina is engaged for 9-months and the income earned is more significant than that of her other one-off engagements, making her more reliant on this income.

On the other hand, the exposure here could help boost profile and win other work. HMRC considers that the following factors are particularly strong pointers towards employment:

• there is sufficient control or right of control over how the presenter presents the programme to be consistent with an employment contract

• the presenter is restricted on working for others

• the presenter has limitations placed on them to engage in similar or related work, to the extent that they cannot obtain work from other engagers in this line of work.

For other examples of radio presenter roles see ESM4139