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HMRC internal manual

VAT Taxable Person Manual

Particular trades: entertainment industry - employment status


Following the case of two actors, A McCowen and S West, HMRC accepts that tax is normally chargeable to trading income. This is because a typical performer or artist is more likely to have a series of separate consecutive or concurrent engagements in different media, rather than being engaged by one business for a regular salary to perform in a series of productions over a period of time and in such roles as may be stipulated by the engager.

Standard Contracts

Although self-employed status is likely to be the norm, there may still be circumstances when a contract of service will apply. Many workers in the entertainment industry - for example ballet dancers, opera singers and orchestral players - are subject to standard contracts or agreements which have been negotiated between trade unions and management. A number of these standard contracts contain most of the features of a contract of employment, and therefore succeed in creating a position of employment. These are:

  • Esher Standard Contract for Ballet;
  • Esher Standard Contract for Opera (Opera Contract Singers);
  • Touring Ballet/Opera Orchestras Agreement;
  • Royal Opera House standard contract for orchestral players;
  • English National Opera Ltd standard contract for orchestral players.

If your trader supplies services under any of the above mentioned contracts, or under a contract subject to the conditions of any of the above, you should regard those services as being supplied by an employee to an employer, and thus outside the scope of VAT. This applies even if the trader is chargeable under trading income for Direct Tax purposes, and even where minor amendments apply to the contract by virtue of a ‘House’ or supplementary agreement.

Standard contracts other than those above should be considered under the normal criteria - eg as self-employed where income is chargeable to trading income.

You should regard supplies made other than under these standard contracts as taxable. Such supplies may occur in the following circumstances.

  • Principal dancers, players, soloists, stars and so on may have separate contracts which do not fall within the standard contracts.
  • When guest artists are engaged, they usually either negotiate their own contract, or retain their standard contract with another company.
  • When a performance is broadcast or recorded, extra payments are often made to the principal performers. If these payments are made under a contract negotiated between the performer and the broadcasting or recording company they are taxable. If no such direct contract exists, the employer (eg the ballet or opera company) will make an extra payment. We would regard this as an overtime payment and therefore outside the scope of VAT.

Our policy

As far as possible, we try to follow the Direct Tax classification of actors and performers. If there is any doubt about status, you will need to go back to basics and examine the contracts under which the artist works. The determinative factor is likely to be the nature of the performers business, and whether the profession is pursued by moving from one engagement to another, or whether the performer has one major engagement, for example a permanent member of an orchestra.

Only the contracts that are a contract for services are taxable. It is also possible that an artist at any given time will be receiving both taxable and outside the scope income. If the taxable income is above the registration limits, the artist has an obligation to register for VAT.