ASK & DISCUSS INDEX

8 years, 6 months ago - Mark Wiggins

Is this an UK shoot? If so, as it was only 3 days you employ the crew on dailies and not PAYE. You pay the National Insurance and they pay the tax. You have no tax liability apart from National Insurance.

8 years, 6 months ago - Gary Braun

Thank you,Mark.
It is a film shooting in the Uk.
Therefore there is an obligation for me to pay national insurance for crew!

8 years, 6 months ago - Mark Wiggins

Except for those classed as Self-Employed by the HMRC (normally HODs, there is a list of grades available from the HMRC Film Office). You just pay them and they do their own tax and National Insurance.

8 years, 6 months ago - Gary Braun

Thank you.Am happy I stopped the project,am not looking for trouble with anyone.Not with national insurance,neither with HMRC.

8 years, 6 months ago - John Lubran

A little knowledge can be less helpful than none at all!

The notion that a micro budget production shot over three days must attract the full force and blunt instruments of governmental employment regulation is, as the proverb says, for the birds; or other cap doffers.

Employment statutes effect 'employees' only. When producing these sort of films there ought not be any reason to 'employ' anyone. Invite those cast and crew who can not be defined as self employed or don't have any other 'corporate' entity available to them to donate their time for free, cover all their expenses and buy receipts at face value. Offer an HONORARIUM. An honorarium is a gift. It's neither a fee nor a wage. Whilst such gifts might not serve as a tax allowable expense the over all cost is likely to be compensated for by freedom from those employment obligations.

Neither ought one be afraid of threats by HMRC or its sycophantic believers who might assert that using such a device can be successfully challenged in law. It can't, unless one is an idiot.

8 years, 6 months ago - Mark Wiggins

Very true what John says. I've worked on tonnes of shorts on the basis he describes. Never heard of any problems.

8 years, 6 months ago - Mark Wiggins

Also, be careful when using the term "daily" to film crew. "Daily" is a contractual status in the Film Industry (as I have discribed), not just a term meaning day by day. Be up front with your crew, people will always work for free or for a token payment on shorts. Shorts are where people learn their craft and try out new team members etc.

8 years, 6 months ago - Gary Braun

Thank you,however John Lubran,uses a legal terminology,which I am not familiar with ,and it seems my british
Director film partner neither.We stopped the film precisely because we have no understanding of it.
We had a excellent script,good cameras,a good editor.Would appreciate if someone could explain it in a simpler
Language.
By the way I ,have to thank SP ,to find a partner who invited me to fund her film.

8 years, 6 months ago - Paddy Robinson-Griffin

Just for a little more confusion and clarity - HMRC aren't terribly worried about shorts/short-term engagements. Everything changes for features or when any crew member is employed for more than 6 continuous days or 7 days in total. As such you can pay all roles on a 3 day shoot 'on invoice' and they will be individually responsible as self-employed people for their tax and NI. They do not need to prove to you that they're self-employed in the same way they do on a feature, but you advise them in their contract that they are not employees, but on a self-employed basis. You do NOT need to set up a payroll, you do not need to set up a pension, you don't need to calculate holiday pay, you do not need to carry the overhead a feature has to.

If you want to pay less than minimum wage equivalent you could try as John says - I know HMRC wouldn't accept that on a feature, but frankly they're really not bothered about 3-day jobs. Just keep a log of everything in case they do ask one day, as you are with all other costs anyway.

8 years, 6 months ago - Mark Wiggins

Proper Dailies, with regard to short term engagements, only really apply to Commercials and Promos/Music Videos. I've never worked on a short for my proper rate; I've only ever worked on shorts for free or for a 'kit fee' (for example a low rate for me and camera). If you are just shooting a short film over 3 days there's no need to worry about tax. Its as Paddy says.

8 years, 6 months ago - Gary Braun

Thank you,Paddy.Am also involved in a eighty five minutes feature film and I know understand that tax implications are far more complicated!

8 years, 6 months ago - Gary Braun

Some of you might remember many questions I asked on this website.Such as my intentions to fund small budget filming project.Received many interesting propositions and finally decided on a serious lady film director.
This till the last step which was money and how to set it up question of partnership agreement and payment procedure to third parties.Then everything went wrong either in the short film either in the feature film.
Do you have a suggestion how to proceed in case I am NOt ready to be implied in tax.NiS,HRMC?
I have no ambition to make money on these projects.

8 years, 6 months ago - Paddy Robinson-Griffin

Hi Gary, I can speak for features a little - as far as pretty much everyone's concerned, features are commercial ventures, much as any other business would be. As we are talking some proper money to produce a feature film, you would normally structure things with a limited company 'SPV' rather than a 'partnership' (which has a specific, but different legal meaning than 'colleague'). This can protect your personal assets, which are otherwise exposed.

As mentioned above - for a shoot/engagement of 7 days or longer (ie pretty much every feature) there's simply no way around being embroiled in NI, holiday pay, etc. At that point it's very much considered being an employer and commercial entity. You may find it useful to focus on the short before getting into the feature - even if you're not hoping to make a profit, you're automatically working within systems that assume you are!

8 years, 6 months ago - John Lubran

Most things in statute administrative law, and this is wholly what empowers HMRC and taxes are, are subject to both the definition of words and subordination of actual law. How does one think that the biggest tax dodgers are able to get away with 'alternative' deals with HMRC?

There's several ways that the employment status of individuals and many other things can be defined in law. HMRC and other government entities are reluctant to pursue those who relyi on entirely lawful defences for obvious reasons. The onus of proof lies with the appellant. They rely on brow beating, threats and obsequious surrender; they are very good at it. I doubt that he stars of Hollywood are subjecting producers to PAYE terms of contract and neither, despite spurious rules asserted by mere government, do actors, or anyone else, working in lessor productions. Courage mon braves! Other realities may apply.

8 years, 6 months ago - Gary Braun

Will definitely listen to your wise advice,Paddy,and try to make short films at first stage.

8 years, 6 months ago - Mark Wiggins

I would just like to stress that employing someone under the 7 day rule is NOT the same as employing someone as Self Employed. Under the 7 day rule Employers still have to do National Insurance. If they do not it means the freelancer ends up short on their NI payments which will affect their pension.

8 years, 6 months ago - John Lubran

I would suggest that unless a freelancer is getting at least twenty five weeks of PAYE terms of work they ought to be using alternative means of covering their NI. For those weeks without employment the freelancer would otherwise need to claim an unemployed credit, which is currently an onerous and time consuming process. I'd also suggest that the so called 7 day rule is merely procedural and has no basis in law whatsoever.

8 years, 6 months ago - John Lubran

Just to qualify my standing as a commentator in these matters I have proven my arguments in courts, tribunals and in the exacutive offices of state functionaries more time than I can remember; and specifically in a few cases with HMRC.

The recent Supreme Court ruling in Miller v The Government has to be one of the most significant cases since 1688 because it upheld the fact that law is indeed constitutional and beyond the qualification of government to amend by statue. How this ruling can be extrapolated far beyond the issue of who has and who hasn't got the power of Royal Perogative is too much to be discussed here but the fact of its relavence and the fact of the inability of cursory study to understand that relavence is at the heart of this matter.

The Lords of Dystopia are being called out even as they appear to be winning.

8 years, 6 months ago - Mark Wiggins

So called 7 day rule? Its not so called, it is its official title. Known as dailies. I can point you to the relevent HMRC documentation. Its the freelanceer who has to fill out their tax return, its the freelancer who has to account for their income, whether it be Self-Employed, PAYE, Lorrimer Letter or 7 Day Rule and if something is wrong its the freelancer who suffers. Every production company I've ever worked for (going back to the early 90s) has employed this rule.

As for dealing with National Insurance as a freelancer. This is also well explained on Government websites.

Any employer who does not adhere to the correct rules and proceedures when dealing with their freelancers is just ripping those freelancers off.

Not talking about working on low budget shorts here. Just mainstream bread and butter.

8 years, 6 months ago - John Lubran

At risk of over emphasis, rules, regulations and even long established procedures are not necessarily law per se. However such assertions can blind us from seeing the proverbial wood for the trees. It's all very well quoting from documentation flowing from statutory presumptions; it doesn't prove that such is enforceable law when tested in law (Such a test is not made at any tribunal or court below the level of the High Court). The fact of any unlawful statutory assertion being successfully enforced beneath the test of law is technically irrelevant. As it happens last June I defended, as a Common Law Attorney, a case in a First Tier Appeal Tribunal, substantially on the basis that the statutory guidelines relied upon by the prosecution were unlawful. I threatened both the appellants and the tribunal itself (a panel of three chaired by a barrister) with the rebuke and costly remedies of Judicial Revue and had to do so in very emphatic manner because I really didn't want to have the matter dragged on through any abuse of process by the impertinence so often assumed by delusions of grandeur. To the unlearned astonishment of all concerned and the wider society watching, the tribunal had no option other than to find in favour of my client. For me this is not about whether or not everyone, regardless of their means or way of life, ought to be protected from poverty in their old age because of course they ought to be. This is about fair and proper governance and how we ought to be protected from bad statutory processes purporting to have a moral and lawful basis when in fact we are still far from such an ideal, despite the cap doffing obsequience of so many. It's a self evident fact that whilst so many of us play the game according to the rules Mark mentioned, many others successfully play by alternative rules without fear of successful challenge. That's a fact!

8 years, 6 months ago - Gary Braun

This issue seems quiet capital for all short film producers.
We have two very erudited people discussing this legal matter,for which I thank.
Will therefore repeat my initial question:
Do I have to pay NIS for a 3 job ?Is it yes or no?
Thank you.
Everyone in this industry is concerned with this question,you cannot get crew only on FREE basis.

8 years, 6 months ago - Mark Wiggins

If its for a short I wouldn't bother. Shorts are not for profit. As I say, everyone works on them and handing out of money is quite informal. Its more like giving them a gift for their time as a thank you. The crew will appreciate you for it and word will get around that you are good to your crew and people will want to work on your shorts.

8 years, 6 months ago - John Lubran

I agree with Mark with specific regard to Gary's question. It's also worth considering, when producing longer projects, the options that might be available where so called 'official rules' just don't fit the requirements of all concerned.

8 years, 6 months ago - Paddy Robinson-Griffin

For 3 days, I'd keep schtum and just keep good records!

For anyone wanting more details about what we're all rattling on about, this http://webarchive.nationalarchives.gov.uk/20140721202711/http:/www.hmrc.gov.uk/specialist/fi-notes-2012.pdf hard to track down document is particularly important for features producers - HMRC do follow up months after production!

8 years, 6 months ago - John Lubran

Thanks for posting that link Paddy. It clearly lays out the opinion of government through its agency HMRC. The document ought to be considered very carefully by producers and individuals who are not able to employ alternative methods lawfully or to challenge the presumption of legislative authority. It's not without caution though. Right at the head of this document it states:

THESE NOTES PROVIDE FURTHER ADVICE WITH REGARD TO THE
APPLICATION OF PAYE AND NATIONAL INSURANCE CONTRIBUTIONS
TO NON-PERMANENT, CASUAL AND FREELANCE WORKERS IN
FILM AND TELEVISION PRODUCTION, UK AND FOREIGN TELEVISION
BROADCASTING INDUSTRY.

THEY ARE INTENDED FOR GUIDANCE ONLY.

The document is from hmrc.gov and is therefore flowing from but in effect also denying the force of its statutory authority. It's noteworthy that wherever statutory guidelines are provided for other statutes where the legislative authority is confident of its lawful authority then such guidelines usually include a statement asserting that the its guidelines themselves have the force of law.

Some of us might remember a previous discussion we had here concerning the powers of government and especially local Council Corporations (whom I refuse to call local government) with regard to child actors and also their taking time off from school. That discussion followed some quite similar arguments until a link to a government website was posted, purporting to advise us of their rules. It was immediately evident that it was not definitive law when at the head of that document it actually declared that it was not by stating, in effect, that its advice was not to be taken as definitive but was subject to the ruling of the courts. It tickled me at the time answer that post ...... "No shit Sherlock". In this HMRC guidance notes they might well have stated the same thing; shrewdly perhaps, they hedged on being emphatically clear about the fact by simply declaring "THEY ARE INTENDED FOR GUIDANCE ONLY."

On the whole I'm largely sympathetic to the aim of HMRC to collect tax, otherwise how else shall we provide a decent infrastructure for all, which would be a nice idea if that's what they actually did. What makes me iconoclastic though is some of the over prescriptive detail asserted and the brazen inequity of it. Ironically it's the very over prescriptiveness of much statute legislation that is its own Achilles heel.

Sadly, with just a few exceptions most of us, even those with relative wealth, can't afford the financial cost, time, energy and other risks of standing up. Hopefully there will be enough Mrs Miller's to ensure that the Lords of Dystopia don't get to over regulate every minute of our lives!

8 years, 5 months ago - Gary Braun

Glad that the question was so well answered by law specialists.
My partner,The film director,who I was supposed to fund ,run away and refuses to proceed.
In the beginning it seemed simple.Script,goodwill,finding a producer.. now ..void..