England and Wales Court of Appeal (Civil Division) Decisions

"It appears from the facts found by the commissioner and set out in the case stated that the taxpayer, after a period in business on his own account and then in employment as an electrician, trained as a vision mixer in 1983. During his period of training and down to the end of January 1985 the taxpayer was employed by Molinare Ltd. as their one and only vision mixer in their business of producing television programmes. In 1985 the taxpayer decided to leave full-time employment with Molinare Ltd. and became a freelance vision mixer, doing work for a number of different production companies.

Vision mixing is undoubtedly a skilled editing job. It involves selecting, in the course of making both pre-recorded television programmes and live television programmes, camera shots taken from different angles which come up on screens in front of the mixer. The shots selected by the mixer determine what the viewer ultimately sees on his television screen at home. The vision mixer works closely with the director. He does not himself produce the film or television programme; he is one of many involved in the production. Others involved are the producer, director, musical director, cameramen, presenters, artistic directors, stagehands, electricians, engineers and so on. The production in which the vision mixing occurs usually takes place in a studio owned or hired by the production company. The studio is equipped with very expensive equipment owned or hired by the production company. The studio is equipped with very expensive equipment owned or supplied by the studio company, though the advice of the vision mixer may be sought on the equipment to be used in a particular production.

After he left full-time employment with Molinare Ltd. the taxpayer prepared a curriculum vitae. He made contact by letter, telephone and personal visits with many companies in the television industry with a view to obtaining engagements as a vision mixer. In the first 14 months he built up a list of 22 companies and in the three succeeding years the number on the list has remained at about 20. Some of the original names stayed on the list. New names were added. Most of the time was spent on engagements with a relatively small number of companies, though not always the same companies.

The taxpayer kept busy in what is a volatile industry. He worked for over 800 days in the period from 2 February 1985 to 5 April 1989. His annual number of engagements ranged from between 120 to 150. In the relevant period he had a total of about 580 engagements. Apart from three occasions when he worked as a technical director, a director and a transmission controller, all of the taxpayer's engagements were as a vision mixer. On six occasions when bookings clashed he provided, with the consent of the production company, a substitute hired at his expense for a sum less than he charged the production company, so that on those occasions he made a profit from the engagement.

The taxpayer has had no full-time or long term contract with any one company since he left Molinare Ltd. He has been free to accept engagements or not, as he wished, and the various production companies have been free to engage the taxpayer or not as they wished.

He takes bookings for periods of usually one to two days on a first come first served basis. The longest engagement was for 10 days. When he accepts an engagement the taxpayer goes to the studio and stays there until his part in the programme production has been satisfactorily completed. He does no other work for the company engaging him. Bookings are usually made on the phone to his home, where he has an office, and are subsequently confirmed by letter which often states the date, rate of pay, place of work and time. There are, however, no formal written conditions of engagement. Varying lump sum amounts are agreed and charged as reward for the work, sometimes with the addition of VAT. The taxpayer was registered for the purposes of VAT from 1 February 1985. Some clients are bad payers and keep him waiting for three months before they pay up. Some companies have deducted PAYE income tax or Class 1 national insurance contributions from the agreed payments. It appears that the taxpayer's charges are higher than the normal union rates of pay. For most of the relevant period the taxpayer was a member of a union, the Association of Cinematograph Television and Allied Technicians. All of the taxpayer's work as a vision mixer is done at the studios owned or hired by the production company on equipment owned or supplied by the studio company. The taxpayer does not provide any equipment or tools of his own. He does not contribute any money to the cost of the production of the programme. He does not share in the profits or run the risk of losses on the production. He does not hire any staff, either to assist him with his vision mixing at the production studio or at home, though his wife helped him with paperwork at home until their marriage was dissolved and he employed an agent for a few months from March 1989.

As to his financial arrangements, the taxpayer keeps a business account at his bank separate from his personal accountant. In January 1985 he effected a retirement annuity policy and a life assurance policy approved by the Revenue under the Income and Corporation Taxes Act 1970. In October 1986 he took out an insurance policy against sickness, providing income after four weeks of ill-health."

"The fundamental test to be applied is this: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" If the answer to that question is "yes," then the contract is a contract for services. If the answer is "no," then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of the considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and the factors which be of importance are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk he takes, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task."

"In the present case, it seems to me that virtually all the relevant factors point to this being a contract of service. The taxpayer is engaged to work for a minimum period of rehearsal plus 22 weeks, and thereafter until the contract is determined by a fortnight's notice on either side; he is engaged to work full-time during specified hours for a regular salary; the company has the first call upon his services, and indeed the exclusive call subject only to this, that its consent to the taxpayer performing elsewhere should not be unreasonably withheld; and then, again, the company provides and owns the gear used by the taxpayer with one exception. All these indicia point to the conclusion is that he is not a person who is performing those services in business on his own account and there are really no indicia to the contrary."

Lord Griffiths said at page 383 F of the report: "All the tests, or perhaps it is better to call them indicia, mentioned by Cooke J. in Market Investigations Ltd. v. Minister of Social Security (1969) 2 Q.B. 173, 184-185 point towards the status of an employee rather than an independent contractor. The applicant did not provide his own equipment, the equipment was provided by his employer. He did not hire his own helpers; this emerged with clarity in his evidence when he explained that he gave priority to the first respondent's work and if asked by the first respondent to do an urgent job he would tell those he was working for that they would have to employ someone else: if he was an independent contractor in business on his own account, one would expect that he would attempt to keep both contracts by hiring others to fulfil the contract he had to leave. He had no responsibility for investment in, or management of, the work on the construction site, he simply turned up for work and chipped off concrete to the required depth upon the beams indicated to him on a plan by the first respondent. There is no suggestion in the evidence that he priced the job which is normally a feature of the business approach of a subcontractor; he was paid either a piece-work rate or a daily rate according to the nature of the work he was doing. It is true that he was not supervised in his work, but this is not surprising, he was a skilled man and he had been told the beams upon which he was to work and the depth to which they were to be cut and his work was measured to see that he achieved that result. There was no question of his being called upon to exercise any skill or judgment as to which beams required chipping or as to the depths that they were to be cut. He was simply told what to do and left to get on with it as, for example, would a skilled turner on a lathe who was required to cut a piece of metal to certain directions.

Taking all the foregoing considerations into account the picture emerges of a skilled artisan earning his living by working for more than one employer as an employee and not as a small businessman venturing into business on his own account as an independent contractor with all its attendant risks. The applicant ran no risk whatever save that of being unable to find employment which is, of course, a risk faced by casual employees who move from one job to another, and such casual employees are specifically covered by the Ordinance."

"In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person's work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.

The process involves painting a picture in each individual case. As Vinelott J. said in Walls v. Sinnett (1986) 60 T.C. 150, 164:

"It is in my judgment, quite impossible in a field where a very large number of factors have to be weighed to gain any real assistance by looking at the facts of another case and comparing them one by one to see what facts are common, what are different and what particular weight is given by another tribunal to the common facts. The facts as a whole must be looked at, and what may be compelling in one case in the light of all the facts may not be compelling in the context of another case."

"Mr. Lorimer provides no equipment (i.e. he has no tools) he provides no "work place" or "workshop" where the contract is to be performed, he provides no capital for the production, he hires no staff for it. No; he does not. But that is not his business. He has his office, he exploits his abilities in the market place, he bears his own financial risk which is greater than that of one who is an employee, accepting the risk of bad debts and outstanding invoices and of no or an insufficient number of engagements. He has the opportunity of profiting from being good at being a vision mixer. According to his reputation so there will be a demand for his services for which he will be able to charge accordingly. The more efficient he is at running the business of providing his services the greater is his prospect of profit."

"When a person occupies a post resting on a contract, and if then that is employment as opposed to a mere engagement in the course of carrying on a profession, I do not think that is a very difficult term of distinction, though perhaps a little difficult to apply to all cases. But I would go further than that and say that it seems to me that where one finds a method of earning a livelihood which does not consist of the obtaining of a post and staying in it, but consists of a series of engagements and moving from one to the other - and in the case of an actor's or actress's life it certainly involves going from one to the other and not going on playing one part for the rest of his or her life, but in obtaining one engagement, then another, and a whole series of them - then each of those engagements cannot be considered employment, but is a mere engagement in the course of exercising a profession, and every profession and every trade does involve the making of successive engagements and successive contracts and, in one sense of the word, employments.

the respondent must be assessed to income tax under Sch. D, because here she does not make a contract with a producer for a post. She makes a contract with a producer for the next thing that she is going to do, and then another producer, and then a third producer, and at any time she may make a record for a gramophone company or act for a film. I think that whatever she does and whatever contracts she makes are nothing but incidents in the conduct of her professional career."

"In that judgment, Rowlatt J. holds that the word "employment" means a post, and distinguishes it from a succession of engagements made in the course of carrying on a profession. He then goes on to hold that, on the particular facts of that case, Miss Braithwaite did not hold any post and that none of her particular engagements could be treated as post, but that on the contrary all her successive engagements must be treated as incidents in the conduct of her profession. Rowlatt J. nowhere says that if an actor enters into a contract in such terms as to amount to what he calls a post, then that actor is not chargeable under Schedule E but under Schedule D. On the contrary, it is implicit in the whole of his judgment, it seems to me, that if a professional person, whether an actor or anybody else, enters into a contract involving what Rowlatt J. calls a post, then that person will be chargeable in respect of the income arising from the post under Schedule E notwithstanding that he is at the same time carrying on his profession, the income of which will be chargeable under Schedule D. The instance of a musician puts that point very neatly.

I do not think that most people today would use the word "post," which does not seem very apt to cover the countless instances of employment in the sense of a contract of service; but every word of that judgment is applicable as between the carrying on of a profession and an engagement in the course of carrying on that profession, on the one hand, and a contract of employment, on the other hand."

(An application for costs was granted to the respondent)