Chapter BIM50151

Record NumberBIM50151
Published date22 November 2013

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...

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