Many people working in the TV and radio sector work as self-employed, employed but more often now as contractors through their own Limited company.
Lorimer Letters
TV or radio workers can find work as a mix of self-employed and employment. In the main HMRC will accept that assignments lasting 7 days or less can be completed as self-employed. Assignments lasting more than a week are often paid through payroll with Income Tax and employee’s National Insurance deducted at source.
A Lorimer Letter refers back to case law (Lorimer v Hall in 1993). Mr Lorimer was a TV technician providing services to up to 20 production companies at any time and he used the equipment provided by those production companies. HMRC contended that he was an employee as he did not fulfil one of the “self-employed” test set out by HMRC (to provide his own equipment). Mr Lorimer won his case and he was treated as self-employed. This case helped to clarify the dividing line between being employed and self-employed.
A Lorimer Letter is provided by HMRC to freelancers that have provided enough evidence to HMRC that the worker is running his own freelance business – these letters will provide assurance to the hirer’s that the freelancer can be paid gross.
Recent evidence is that these letter’s are becoming harder to obtain.
Is working through a Limited company the answer?
You could obtain the advantages of working as self-employed without needing a Lorimer Letter if you set up and operated through your own Limited company. Your company would provide the services to the TV/radio company and therefore the TV/radio company could pay you gross.
If you work in the TV or radio industry and you would like help setting up and operating your own limited company, then please contact Clearways Accountants via the contact form or on 01737 244298.