Bit-part 1930s actress could play major role in contractors' fate

Lillian Braithwaite, a bit-part actress from the 1930s, could yet play a pivotal role in the case for contractors to be seen as being in business on their own account and outside of IR35.

Miss Braithwaite, who played Lady Berwick in the Hitchcock film 'Downhill', set the precedent for actors to be classed as 'self-employed' by the Inland Revenue when she took her case to the High Court some 70 years ago.

The case, Davies (H.M. Inspector of Taxes) v. Braithwaite, was heard by Judge Rowlatt on June 10, 1931.

Lillian Braithwaite - could her case clear contractors?

Kevin Miller, a Director of the Professional Contractors Group, explained the case's relevance. He said: "In the 1990's, the Revenue tried to reverse their treatment of actors, which after the Braithwaite case tended to treat them as self-employed. However, in an unreported case before the Special Commissioners, two actors, McCowan and West, fought their re-classification as 'employees.' As the case was unreported, we do not know what factors led the Special Commissioners to conclude that McCowan and West were in fact self-employed, but it seems highly likely they were following the earlier Braithwaite decision. Their decision must have been strongly held as the Revenue chose not to appeal the decision. Instead they accepted that actors working on standard Equity contracts (Equity is an actors' union) of less than two years are self-employed."

He continued: "If you were to change the word 'actor' to 'contractor' in the standard Equity contract it is almost certain the Revenue would fail the contract as being 'caught by IR35."

Key extracts from the judgment of the Braithwaite case demonstrate the judge's appreciation of the difference between contractor and employee in 1931.

Judge Rowlatt found that: '[Miss Braithwaite] never was a servant in the sense of master and servant, but is a professional person carrying on her profession in the way in which her profession is carried on.

A standard Equity contract

'I do not think that the question turns on the degree of skill at all. It seems to me that the most skilful and distinguished persons, whose qualifications are very rare in art or medicine, or any other profession where distinction is difficult to obtain, may well enter an "employment," and, if they take a situation for years and made it their life occupation, it would be no answer to a claim to assess them under Schedule E to say that they are very skilled and distinguished persons, because such very skilled and distinguished persons would be exercising an "employment" in the sense of Schedule E as much as anybody else who holds an office.

'On the other hand, if a very humble person takes a series of jobs for an hour or so each, he would be carrying on a trade. Nor is the mere duration of the engagement the criterion. An actress may make a contract for the run of a play, which might be a considerable time, but it would not necessarily thereby become "employment" within Schedule E.

'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 first one engagement, then another, and a whole series of them - then each of those engagements cannot be considered an 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.

'I think that whatever [Miss Braithwaite] does and whatever contracts she makes are nothing but incidents in the conduct of her professional career.'

--

Richard Powell, UKTECH