Client supplies mobile discos. He used to do some of them himself but the major part has always been done by other DJs. He sees himself as an agent of the other DJs. Clients pay him his fee (say £100) when the booking is made and the DJ's fee (say £150) directly to the DJ on the night, although the customer might not know that the £150 is all for the DJ. Occasionally, full payment is made direct to the client. He has a separate account for this and when money is received into this account, he pays the DJ's share directly to the DJ and he transfers his own share into his main business account. His web site does not make clear that he is working as an agent. DJs provide their own equipment and he pays them no expenses.
What is the likelihood that he might not be considered an agent, and that all the income is his, and the DJ's fee is a cost of sale?
Replies (2)
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Hmmm
Could the clients consider they are paying a deposit for the disco, as opposed to a separate supply to the 'agent'? Could he be engaging (or employing) the self employed person and then acting as principal?
I think, to have any chance, you would expect there to be some kind of agency agreement or some indication that all concerned consider him an agent.
I think you already know that this is ripe for HMRC to have their own special view!