ASK & DISCUSS INDEX

9 years, 10 months ago - Paddy Robinson-Griffin

Hey Dan,

The PACT/Equity Low Budget agreement (under £3M) rates are currently £144-£288/day, plus £13-odd holiday pay plus a pro rated share of 5% of producers profit. Quite specifically, though, HMRC say actors are not PAYE, and we don't have to withhold tax/pay NI on their earnings.

I do agree somewhat about deliverables, about contracting cast and crew, I suppose what I was failing to say clearly is that there's no point sweating story/option/screenplay or composer deals at this stage when the cost can be pushed as those deals will only be needed if the film is going to sell (and we all know that's far from a given!

9 years, 10 months ago - Paddy Robinson-Griffin

You cannot rely on templates contracts, who do you sue if it all goes wrong? I guess you could argue that an Equity deal is a template, but it's the result of decades of negotiation!

Firstly, what's your budget level, roughly? Do you have substantial money? If you've got enough to use equity deals for cast, you'll be aware of the other constraints (7 day crews, etc), so it'll affect how your contracts are structured. If it's more of an enthusiastic but noncommercial project, perhaps you can just write your deals in plain English. Interestingly, I see you're looking for a templated deal for a line producer, when you engage one, they can probably help with this.

BTW, you'd usually expect crew to use the same deal, so same contract for LP and Soundie and all the other grades. Script/option you can always do when you're distributed as a part of the deliverables. Original music, wait until post production.

9 years, 10 months ago - Marlom Tander

Noooooooooooo to templates (except as guide).

There are times to pay lawyers and actual contracts is one of them. In this case, a lawyer with film contract expertise.

What you should do is write down in plain english the agreement you want then have the lawyer turn it into a contract.

Cast and Crew - You are planning to pay decent day rates aren't you? If not then you have a major problem. I personally am of the opinion that there are only two safe ways NOT to lose a minimum wage case. (And no, you can't contract your way out of it).

1) Put everyone on min wage and pay them.
2) Have everyone on a revenue share model PLUS profit participation. Revenue share means that as the cash comes in they get paid ahead of anyone else, and if the film moves into profit, a major chunk of that is assigned to them. (If notional wages is 30% of cost, the profit pot should be 30% of revenues in excess of costs, in order to fairly reflect the risk being taken by cast/crew). Your documentation should make it clear that they are more likely to get nothing than something, and very unlikely to see any profit participation. And if your film is a success and they all ten times what they would have been paid, be happy for them, because you couldn't have done it without their support.

If you have SOME money for wages, try and pay everyone min wage during shoot, with any additional being routed as per (2).

9 years, 10 months ago - Paddy Robinson-Griffin

Just a nod about paying people - don't forget to allow for payroll costs and fringes (holiday pay, NI, etc). You cannot (as in legally cannot) pay most grades on invoice for jobs of over 7 days, you must pay them PAYE or via a limited company. Most grades simply cannot be self-employed, no matter if they're self-employed doing shorts, other industries, etc. The only way to pay a focus puller etc legally on a feature is putting them in payroll (or they contract via a limited company). HMRC do check, routinely, after each shoot. I mention this as it extends Marlom's points above, but not in a good way. It's why I'm pressing to see if it's a commercially viable project, or if you could get away with it being effectively a hobbyist collaboration. If you don't have a lawyer and accountant, it's important to not use their language lest you stitch yourself up ;-)

9 years, 10 months ago - Dan Selakovich

OK, Daniel, stop everything right now. First you need to educate yourself on film law. Start with this book (I've plugged it here before, but I promise I don't get a kick-back. It's just a good book):

Clearance & Copyright, 4th Edition by Michael Donaldson and Lisa Callif. After you've read that, get 2 more books on current film law and read those.

Clearance and copyright covers 80% of film law. It's not just about "Can I use the Nike logo in my film?". This book will give you an excellent start to knowing what you don't know. It's written by film attorneys (yes, for the U.S., but mostly applies in the U.K. as well). As part of the book, there are contracts you can download, but like everyone says, see a lawyer. But even before you walk into a lawyers office, educate yourself on film law. Right now, you don't know what you don't know. You don't even know what questions to ask. For example, do you know what E and O insurance is? Or how to get it? (Without E&O, forget a distribution deal). Do you know that you need a lawyer well versed in clearance and copyright to read your script BEFORE you go into preproduction to avoid any lawsuits down the road? I promise you, many an indie filmmaker has completely screwed themselves by skipping this step. Do you know who owns your footage if you just get some DP to shoot it without a contract that says the right things in the correct way?

Why would you need to option your own script? Do you know what an option is? If you set up a film corporation, sell yourself your own script for a dollar if you want. Or don't sell it to yourself at all, unless of course you plan on suing yourself down the road. Don't option it. That's silly.

Right now, you have a very short list of contracted personnel. Everybody on the crew needs to sign a deal memo, at least. Are you really not going to use any grips? Or a gaffer? As for actors, here in America, I'd be using SAG. That's a whole new set of concerns and union rules to follow. I don't know what the equivalent of that would be in the U.K., but you need a 1st AD that understands those contracts. And if you're hiring union actors, is there a minimum of union extras you have to hire? There is in the U.S.

Are you paying people? Then hire a payroll company. Don't try and do it yourself. As Patty points out, there is much that goes into paying people. If you're hiring them as independent contractors; shame on you. But if you're not paying them, you'll have to, but I'm sure there are rules regarding that as well. Many producers in the U.S. try to get away with "independent contractors", but all it takes is one crew member to complain to the labor board and that producer is fucked. Maybe U.K. is the same.

Now, once the film is made, you'll have a boatload of "deliverables" if you're lucky enough to get a distribution deal. Those deliverables can be a thick binder of stuff. Everything from contracts and deal memos, to what format you deliver the actual film on (35mm film, digital, and what type of digital), to still photographs (you don't list a stills photographer above: BIG MISTAKE), to an M & E mix, to an MPAA rating of PG-13 (though fuck any distributor that wants that up front)... it's a huge list that is a CONTRACT and can be very expensive.

Hopefully I've made my point. Learn all that you can. Write down questions you have after that, then visit an attorney. Making a film can be a wonderful experience or a complete nightmare. Make it a wonderful one.

9 years, 10 months ago - Paddy Robinson-Griffin

Just a note on SAG/Equity (the British equivalent). I've never been a SAG signatory, so I'll defer to Dan here, but Equity does carry some overhead. 'Equity Minimum' for low budget feature is only £144/day, but is overloaded with usage fees too, so can double depending on your budget. But (and for historically good reasons), Equity won't trust your declared budget figures, so you need the accounts signed off by a Production Guild member accountant (chargeable). A part of the Equity deal is holding fees in escrow, this is provided by PACT (Barry Kimm from PACT is brilliant, and who runs this whole side of things and is your interface with Equity), and that requires registration (chargeable). If you don't use Equity contracts for cast (and the cast aren't of a status to require you to), then save yourself the overhead (it works out to about £5k+), using that to pay cast and crew appropriately instead :)

Dan is absolutely right about deliverables, however I suggest you don't panic about those at this stage - if you make a brilliant film, and someone wants to buy it, you can worry about most of that stuff then, just do make sure you get basic, even plain English agreements for everyone as you go along. Dan's book suggestion sounds worthwhile, too.

I am not trying to scare you off, but this thread has become about legals and payment, so I'm hoping the wider readership will find it useful.

9 years, 10 months ago - Glyn Carter

My advice is not to take any advice proffered here, except this: get an accountant, or accredited payroll provider, and pick their brains, and appoint the one you understand best. Initial advice will be free, and a paid service should be no more than a few hundred. You can always upgrade later. Or terminate. I don't know your budget, but if it's micro-micro, you may only need a good book-keeper.

You may want a film specialist if you're getting Film Production Tax Relief, but otherwise the rules are the same for any business.

It's sensible to set the production up as a Special Purpose Vehicle limited company - that is, a limited company set up to produce and market one single film. There is no law saying you must do this, but (a) it looks more professional and (b) you are personally not liable for the company's debts.

I fear Paddy is setting hares running about the 7-day rule - this is irrelevant as all your cast and crew will be freelancers (not paid employees). They'll be getting an agreed fee (and/or expenses), or a deferred payment/profitshare deal. They are responsible for their own tax and NI, and holiday pay come to that. They may even be registered companies in their own right. Of course they can work for more than seven days as long as the contract is to provide a service, not a contract of employment. (Only if they were providing the same "service" exclusively to you, for several months, would HMRC check that it wasn't a dodge to avoid tax and NI.)

9 years, 10 months ago - Yen Rickeard

In case it is not absolutely clear from all the above, contracts are essential with all the cast and crew.(and locations etc.) If you don't have them signed before shooting starts, the whole thing can be held to ransom at any point (worst case scenerio) Everyone is 100% there to make the best film possible, but it only takes one crotchety guy or one big misundertanding for things to get unpleasant. When you have everything sorted first, things are more secure.
And yes, making the film is the easy part. Learn business stuff!

9 years, 10 months ago - Parvez Zabier

I am an experienced production accountant /producer and can assist you. You can
contact me on 007zab@gmail.com

9 years, 10 months ago - Marlom Tander

7 day rule

Ouch

http://webarchive.nationalarchives.gov.uk/20140109143644/http://www.hmrc.gov.uk/specialist/fi-notes-2012.pdf (note this is an archived copy. Be worth checking still all applies).

I handle payroll for my main (non film) business. I'm new to it (we've gone from zero to 5 employees in 2 months) and the whole process is a bit of a mess. I'd really hate to think what a dogs dinner it would be for complex constructions. No doubt doable but def one you'd want to place in the hands of a suitable accountant.

9 years, 10 months ago - Paddy Robinson-Griffin

Glyn and I will have to differ - I'm going by http://webarchive.nationalarchives.gov.uk/20140109143644/http://www.hmrc.gov.uk/specialist/fi-notes-2012.pdf the 2012 notes from HMRC which is entirely separate from IR35, which is what I believe Glyn may be referring to. Please seek your own legal and financial advice from a qualified practising Production Guild accountant.

If you're going for DCMS tax credits, you'll require a limited company, which he mentions - an SPV :)

9 years, 10 months ago - Dan Selakovich

Hey, Paddy. Just a point about SAG here: there are SAG low-budget agreements. On the upside, $100 a day for actors sounds pretty sweet. On the downside, that contract is a nightmare if the film makes any money at all. Much safer to go with the standard contract and pay properly up front if at all possible. And even with the low-budget agreement, you still have to pay health and pension.

As for deliverables--I sort of agree with you and sort of don't. For example, if you don't have a contract with say, an actor, before you shoot, he may decide he doesn't like the film and doesn't want to sign. Chasing him down after the fact to adhere to the deliverables contract would be a nightmare. Or if deliverables asks for promotional stills: they want actual stills from the shoot, not frame grabs from the movie. That's something you simply can't get later. A distributor is going to want just about every bit of paper a film generates (that's an exaggeration, but not much!), better to be aware of what a shortcut now can do to you down the line. No, don't panic. But the more aware you are of what you need ultimately, the better off you'll be.

I've seen this too many times and it's really sad: the filmmaker decides not to hire an attorney to read the script for errors and omissions. If there is a legal issue once the film is finished, you have only a few choices. The worst being recutting your film. The best is paying a lawyer to negotiate terms with the offended party, then paying the offended party a lot of cash. There are just so many ways to get burned. But equally, the things in your script that you are concerned about might be perfectly safe and legal. But I've also seen filmmakers chance it and come out fine. For me, the peace of mind that an attorney can give you is priceless.

True, I'm trying to scare Daniel just a bit. But it's for good reason. I'd really hate for him to go to all of this effort and get burned.

In the end, I think all of us have been pretty broad in our advice because we have no idea what kind of film Daniel is making. If it's "My Dinner With Andre", I'd temper my advice to that. That's an easy film. If it's a black comedy that jabs fun at corporations, with slightly changed names and real life incidents as part of the story, I'd be more worried for him.

9 years, 10 months ago - Yen Rickeard

Excellent advice here Daniel.
You will find some templates for contracts on Shooting People under production>resources. As said above, don't just take these and shove in the names concerned. As suggested for a feature film you need a lawyer, and your line producer should be able to help with this. Your line producer is going to be your right arm (and probably leg) for the making of the film so choose someone you get on well with and who shares your vision.
Good luck with it,

9 years, 10 months ago - Dan Selakovich

Paddy, I couldn't agree more. And more importantly, I think you've given Daniel some important things to consider and what can wait. I really wish filmmakers would delve more into the legal/business side a bit more. It's one thing to make a choice about what to skimp on. It's quite another to act out of ignorance. Ignorance is so very expensive!