Friday, June 09, 2006



I was struck by a headline in Tuesday’s Times, “Call of the dogs, Mr Brown”. I learn from this that “whereas actors, singers, dancers and musicians have agents as a necessary business expense other entertainers, sportsmen and authors do not need them in the Revenue & Customs view. At lease that is what the author of the article, Libby Purves, thinks the Revenue view is. She goes on to claim that “if the Revenue attempts to make that case [that authors don’t need agents] it will make itself ridiculous”. Indeed apparently “such are the alarms and uncertainties of tax rulings and rumours that a whole tranche of thinkers – writers of science, history, philosophy or challenging fiction, freelance makers of documentaries, essayists, journalists,, screen popularies of argument and ideas – feel perpetually stalked by Mr Brown’s janissaries with threats of incomprehensible and retrospective punishment”.

Well, well what is going on? The Sunday Times tells me that HMRC is mounting a tax case against Richard Madely and Judy Finnigan that will set a legal precedent. Accountancy Age tells me that Richard and Judy are appealing against an assessment going back 10 years which is something to do with a coding notice. only employees have coding notices. The self-employed do not. So if it is something to do with a coding notice it is most unlikely to affect the vast majority of authors, freelance documentary makers and, I suspect, popularisers of argument (whatever they are) as such people are almost always self-employed.

Libby’s contrast with actors, singers, dancers and musicians is puzzling in the context of the self-employed. Like Libby I can see no possible basis for a distinction. It does however make sense in the context of employees, because although I can myself see no logical distinction Parliament can – or at least the House of Commons as it was constituted in 1990 did. It included a provision in the Finance Act 1990 to allow a deduction from earnings from an employment as an entertainer for agency fees and defined an entertainer as “an actor, dancer, musician, singer or theatrical artists”. I accordingly imagine that Richard and Judy’s dispute with the taxman is over whether or not they are actors or theatrical artists – although as a TV presenter does not seem to me to fall naturally into either of those categories I am still puzzled why they seem so confident of winning.

It is accordingly a bit unfair of Libby Purves to blame poor Gordon Brown for the sins of John Major, the Chancellor of the Exchequer who introduced this provision. It was introduced because at the time the Inland Revenue were seeking to recategorise many actors and musicians as employees of theatres. The relief was given in the context the Equity and the Musicians Union accepted that in many cases the Revenue’s view was correct. I don’t recollect anguished shouts at the time from authors, journalists and others begging to be reclassified as employees, which I imagine is why John Major saw no need to extend the relief to such categories of people.

Perhaps I am being unfair to Libby Purves. I suspect that she does not pen her own headlines, and her article does not actually blame Gordon Brown but rather his janissaries. I assume most Times readers know what such a person is. Sadly I didn’t. Nor could I find the word in any of my dictionaries but I learn from the internet that it means “a member of a group of elite, highly loyal supporters.” I assume Libby was seeking to attach that complimentary accolade to the members of the staff of HMRC.

If so, this raises an important constitutional issue. Most of us believe that under the UK constitution it is the role of parliament to make the law and of the Executive (which would include HMRC) to enforce it. Any suggestion that Gordon Brown ought to tell HMRC not to enforce laws enacted by parliament (in this case section 352, ITEPA 2003) is abhorrent to me. If he were to consider that a law introduced in 1990 is no longer appropriate the proper course is to ask parliament to change the law not to tell civil servants, however elite and loyal to him they may be, to ignore it.

I see that the Sunday Times (which appears to be the source of the Libby Purves article) says that the decision in Richard and Judy’s case could affect big names such as J K Rowling, Jamie Oliver, Frank Lampard and Michael Owen. I am somewhat surprised if J K Rowling and Jamie Oliver are self-employed. If they are not, I cannot see how an employment case can affect them – although the Sunday Times does also tell me that Margaret Drabble regards it as “disgraceful” that HMRC should seek to enforce the law as enacted by parliament. She also seems to believe that HMRC are seeking to enforce this employment income provision against the self-employed: “the self-employed are the most vulnerable with regard to tax anyway, so this will be a terrible blow”. Now that would be disgraceful! It seems to me wholly improbable though.

Frank Lampard and Michael Owen are undoubtedly employees of their clubs so they do have a problem if they have been claiming relief for agents fees. Although many football fans suspect players are acting when they are tackled and by writing on the ground until their assailant is booked, after which they seem to stage a remarkable recovery. I doubt that HMRC categroise them as actors. However I doubt that Frank and Michael have been claiming a deduction for agents fees because the press seem to believe that in most cases the club not the player pays the agent.

I await with interest the result of Richard and Judy’s case. In the meantime I hope that the Times might invite a “screen populariser of argument and ideas” (whatever that may be) to explain – and perhaps popularise – why he or she feels perpetually stalked by Mr Brown’s elite and highly loyal supporters!

Robert W Maas


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