Open Letter to Rishi Sunak and The HM Treasury, from a freelancer Film crew worker.
Dear Mr Sunak,
I am writing to you as it seems I have fallen through the gap between your two financial packages to help pay wages for employed and self-employed people. Indeed many of my freelance colleagues in the Film and TV industry who make their income via a Limited Company are also in the same predicament, as well as many in other industries too.
I started as a runner in Film and TV on a mixture of short PAYE contracts and Sole Trader work, for which I filed Self-assessments for my tax. I progressed up the ladder to be a First Assistant Director, at which point my gross income was at a certain point that I was advised by my accountant in 2014 that the most sensible way to continue as a business was to set up a Limited Company and offer my services out through this as a contractor. Many hundreds of thousands of people do this, paying both our Corporation Tax and our Personal Tax on all salaries and dividends. But as any Limited Company director will tell you, the most sensible way to draw funds out of your company is to pay yourself a minimal salary and take the rest of your profits as dividends. This income has already been taxed at 19% in the form of corporation tax, and dividends are taxed again at 7.5% as personal earnings. This is what any knowledgable business owner would do and is what all our accountants have advised us as best practice for our situation for years.
So now I am in a situation whereby I am not ’self-employed’, but am ‘employed’ by my own company (the sole employee), but am still a freelance film crew member earning from job to job. All my work has dried up, my industry has closed for the foreseeable. I cannot seek any more income for my company or myself. I only pay myself a ’salary’ of £8600 / year, and I take out the rest of my personal income as dividends. I have 3 mouths to feed, a mortgage and many other personal and company overheads to pay, all priced up and based on the solid bedrock of my overall income over the past 6 years. My wife cannot claim anything either due to coming off of Maternity pay from her employer in January and deciding to take one more month of leave (unpaid) in February before going back to work, so her Feb earnings are zero on her PAYE contract.
We have BOTH fallen through the gap.
I may (there is mass confusion amongst accountants and financial advisers and the government on whether sole employee / directors can even legally furlough themselves) be able to claim 80% of my PAYE salary which is £719 / month, so £575/month - this is not enough to keep us afloat I’m afraid. On my new emergency household budget, having cancelled all my comfort expenses of Netflix and such things, I need a minimum of £2.5k / month coming in to this household to keep us above water through this crisis. I need you to amend your bill to allow income from dividends to be taken into account as personal earnings, and to extend the grant to people in my situation.
I urge the government to consider those people like me, slightly outside the ’normal’ ways of earning for whom these packages of relief are not suitable and for which we are not eligible due to semantics or the ways in which we earn. Why can’t you simply look at our tax returns like mortgage companies do to ascertain our income? Very simple. I earn a decent above-average personal income each year which I pay all my tax on and therefore should be eligible for a grant of £2500 like all PAYE and Self-Employed people. The Government set the tax rules and we adhere to them. We operate and earn inside the guidelines and the law. And the same government encouraged small businesses to set up and operate. Now when we need something back, we are told we don’t qualify.
I appreciate you have a lot of decisions to make and are making an effort to support citizens through these times, however please don't leave some of us behind - there is an easy way to carry us all through this. I currently feel deeply let down by the Governments plans and fear for the financial security of my family. Please make amendments to the bill to include income made from dividends.
Many thanks for your time,
Dan Gibling - Freelance 1st Assistant Director, Buckinghamshire.
