ESM4136C | Particular Occupations: Entertainment Industry: TV and Radio Presenters: Factors in Determining Employment Status for Tax: Other indicators: Financial risk / Opportunity for Profit

A strong indication of self-employment can be the financial risk which the presenter runs in doing the job. In general terms, the greater the financial risk the stronger the pointer towards self-employment. Individuals who risk their own money by, for example, buying assets, bearing their running costs, paying for overheads and materials are likely to be self-employed. Employees do not usually need to risk their own capital.

Financial risk is not the risk of being without work, paying an agent search fees or similar or having minor expenses, it is the possibility to make a loss by incurring material business expenses or increase profits through business skill. Where the presenter is personally exposed to significant financial risk this is a strong pointer to self-employment.

Costs incurred can be relevant to financial risks but must be significant and incurred as a requirement of the contract. Whether they are significant depends on the value of the contract. Costs incurred through personal preference or minor everyday costs such as laptops, tablets and mobile phones are not indicative of financial risk.

Where a presenter is required to and does correct sub-standard work in the presenter’s own time i.e. they do not get paid again for correcting the work, then this is a pointer towards self-employment. If a presenter does this whilst still being paid, or suffers no financial consequences, it points more towards employment.

An example where there may be financial risk is where the presenter has agreed a fee with the engager for presenting the programme and out of that fee has to fund location costs, hire crew, and provide equipment, with the risk that they could be out of pocket. In some rare cases, presenters have taken a significant part of their fee as a share of uncertain future sales income, exposing themselves to financial risk.

For other factors you may need to consider see ESM4136