Tax / IR35
Until April 2021, it has been the responsibility of the individual worker to ensure Tax is being paid in the correct manner.
Under the reforms, that responsibility now falls to the engager.
Production Companies, as the engagers, are now liable to ensure a worker is taxed correctly, so it is highly likely that they are going to be over cautious when it comes to contracting those of us who own and run Limited Companies / Personal Service Companies (PSC)
There are concerns that some engagers are “sheep-dipping” their freelance workers, by installing random crew wide policies instead of examining each individual relationship. The result of these actions will force groups of freelancers to be engaged under PAYE contracts, even though they are clearly self-employed.
My engager says I have to be employed as a PAYE worker
The page that hosts the HMRC Employment Status Manual (ESM4115) states :
"Behind camera individuals in the media sector are roles such as camera operators, producers, writers, directors, gaffers, carpenters, electricians and stage managers"
This is due to a list of grades found in Appendix 1 that HMRC already considers to be self-employed, denoted by an asterisk, *, in Column B. These grades include Gaffer, Best Boy, Electrician and others.
Unfortunately, many Productions have not fully understood the arrangements, and are instead imposing blanket policies that are incorrect, or are using the HMRC online Check Employment Status for Tax (CEST) tool to incorrectly assess as individuals Tax Status. This can lead to differing outcomes, especially if the Production Person punching in the data doesn't fully understand the role or contract you will be engaged under.
This is the same checker that you could fill out, and compare the 2 reports to make sure the details the engager has entered into the checker are correct. If they are different, you can use that information to challenge their decision.
Lorimer Letter
If you can prove you have worked for less than 10 days for each of at least 10 separate engagers in the previous 12 months, you could apply to HMRC for an exemption letter, known as a Lorimer Letter or an LP10 Letter.
Contact HMRC Film and TV Production Unit SO733 for more details and application process.
Your accountant is the best person to guide you through your personal taxation circumstances
HMRC Employment Status Manual ESM4115
"Behind camera individuals in the media sector are roles such as camera operators, producers, writers, directors, gaffers, carpenters, electricians and stage managers" - HMRC
HMRC Employment Status Manual ESM4118
Behind the camera workers roles normally treated as self-employed - Appendix 1
How do I pay tax as a self employed freelancer?
Freelance employment status and IR35
From April 6th 2021, freelance members who qualify as “workers”, but remain self-employed, will have a new right to be given a written “statement of initial employment particulars”, on the first day of any engagement.
Bectu
BECTU Freelancers Tax Guide
Downloadable Guide. Contains detailed information on the steps to take if a worker is wrongly categorised as being an employee. Member Only
This Guide is available from the page above
Tax With Tony
Tony Lennon was BECTUs Tax and Employment Guru, and a specialist in IR35
Tony has since retired, but Bectu Official Paul Evans has since brought himself up to speed for all IR35 issues
Do I need a Contract?
Am I Self Employed?
Should I set up a Ltd Co?
What is iR35?
The rules apply if a worker provides their services to a client through an intermediary, but would be classed as an employee if they were contracted directly.
If you’re finding it difficult to make a tax payment you should ask HMRC about affordable monthly payment options, called a Time to Pay arrangement.
They will work with you to try negotiate time to pay what you owe based on your income and expenditure.