Financial assistance offered by UK government

[Andrew PavordParticipant]

The government has offered grants to help workers during the Covid-19 Crisis, but the qualifying restrictions mean that film crews are unlikely to benefit.

There is a hard cut off point for those freelancers whose average annual profits total more than £50,000. This means that if you earn £49,999 you can claim £2500 per month. Those earning £50,001 get nothing (though they can possibly claim universal benefits, and good luck with that).

This “assistance” is not going to benefit many in the UK film industry.

Firstly, the revenue say that you can only be freelance (Schedule D) if you are head of a department. HoD’s earn over £50K, because of the responsibility they take on and their experience.

Secondly, most crew are PAYE, made to pay tax at a higher rate, simply because the revenue has for many years not recognised that film crews are in fact, all freelance. They work for single purpose companies, set up to handle production then dissolved as soon as the shoot is wrapped.

Thirdly, those crew that are neither Schedule D or PAYE are paid through a personal limited company, the revenue has been trying to close down this loophole for years, because it allows these wise folks to pay significantly less tax. Needless to say, company directors getting most of their pay via dividends will get nothing from any government grants.

However, unfortunately, PAYE crew members will still not get a grant. The way the government has structured PAYE grants is that the company paying the tax. These companies nust furlough their staff, then pay 80% of the wages as normal, claiming this back in June. Most productions wrapped in November and December, (our industry is predominantly seasonal). Those that have recently got underway have simply closed down paying 2 weeks notice. All this means that most film crews will be left with no government assistance to pay bills, rent or mortgage, council tax, food or any other expenses.

Its about time the Inland Revenue allowed every member of the film crew to be schedule D. After all, they have no job security, and no protection under employment law. The PAYE system is for permanent employees and should not be used for any workers under temporary contracts

[Rob ChampionParticipant]

I am fortunate enough to head the location management department of a continuing drama at a broadcaster and am therefore on the staff. My LMs are sched D, my UMs and LAs are PAYE and I forward them all the information I get with great sympathy. The company is making representations to HMG. I agree with Andrew. The sheer practicalities of having intermittent work on PAYE and therefore waiting for year-ends before the proper tax bill is evened-out is untenable.

[StrangeParticipant]

I totally agree, the current scheme is deeply unfair. The £50k cap which as your example explains can be a matter of pence and is an arbitrary and ill thought out amount. But if a person is a full time employee on the furloughed scheme there is no cap. So they can earn £100k a year and still qualify for the £2500 a month. Add to this the fact that a household that has 2 full time employees earning the £5000 a month furloughed grant while a household with one earner, a self employed person earning more than £50k gets nothing or Universal Credit.
Finally I have to say the many people that are set up as Ltd Companies are not wily, shady or tax dodging. THEY STILL PAY TAX ON DIVIDENDS so it is grossly unfair to not recognise the dividends as part of their earnings. As there is a cap of £2500 it would be straightforward to implement a change to the scheme that removed the £50k cap for the Self Employed, incorporated salary and dividends as proof of earnings for Ltd Companies and rolled that out across the board. That way people that have paid hundreds of thousands of pounds in tax over the years wouldn’t feel totally neglected in this the most desperate and unprecedented of times.

[DroverParticipant]

I agree that this is unfair for all freelancers across the board. Hopefully this is a start point and more announcements will come in the coming days.

It’s a situation in a flux at the moment and I can only hope evolves quickly before leaving people behind

I want to pick you up on saying limited companies pay significantly less tax this is incorrect and should be changed in the post. A lot of production companies encourage hod’s to become limited companies and tax wise we pay just like everyone else and to say significant less in your post couldn’t be more wrong

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