[The Boogie Man]

ok,got that. My next question was, Is there a difference between what this industry calls freelance and self employed?
As it seems some jobs are "quote/t+c/job/invoice/paid" and some seem to be "gather on street corner/get in van/work 14hrs/cash in pocket/wait by phone"

[J Pearce]

Freelance is working for several companies, usually on a job by job basis.

Self employed means you are a subcontractor, acting as an external contractor working under the terms of your contract (verbal or paper).

You can be a freelance casual employee, at which point you are freelance but not self employed.

[slim_mcslim]

I was visited by a man from HMRC the other week, who told me that they were investigating the whole entertainments sector and going to be cracking down on the whole sub-contractor set-up. As far as he was concerned genuine sub-contractors should fail the master/servant test.

He explained that a company who wished to employ the services of a plumber would call up a plumber and ask him to come do a job, the plumber would then dictate what day he was available to do the job, the company could then choose to employ him or not. Where as in this industry a company wishes to employ the services of a lighting technician but they require the technician at a certain time on a certain day, the technician can either choose to accept or not accept this booking, but the technician cannot negotiate the date or time of booking so they fail the sub contractor test, at least in the eyes of HMRC.

He feels that all staff freelance or not, should be paid on PAYE with appropriate tax an NI deductions. This is not something that I wish to happen, but I feel it may be something that is on the cards... I have no affiliation with HMRC however it is widely reported that the integration of the two services went much better than expected and they are now much more efficient than they used to be, this was also the opinion of the man who came to visit us.

[JDP]

I think the terms/meaning of self employed and freelance run in parallel with each other...

There are some freelancers who are actually ltd companies. And some naughty 'freelancers' who have full time jobs, and 'freelance' on the side.

Essentially, self employed people and freelancers are the same status's. A FEW, a good example being the people that are in Neg Earths A List/their 'freelance' project managers, and other similar companies A List are seen as self employed, but actually 'full time' if that makes sense.

From a rock n roll point of view, mostly, I find myself away working, in fact I counted 7 years of my life being between 3 tours! The tax authorities don't really like it when I spend 2 years on tour, invoicing one company, but thats the way it is.

Realistally speaking, you should really have say 3 invoice at least 3 companies in a tax year to show you should be self employed, and not full time, like really I should of been. Never been sure exactly why this is, I am assuming full timers are on a higher tax rate than self employed people?

When you become Ltd, those issues go out of the window, as the tax people get BOTH your personal taxes AND corporation tax, which does mean if you are a 'freelance ltd company' you will end up paying over 40% tax on your earnings, 21% on company taxes and whatever it is on personal salaries. That said, I am told there are certain tax advantages of doing this?

EDIT, just read what Slim had to say, thats very odd judging it on that basis. In fact it silly. If your house was flooded and you NEEDED a plumber on that day, if he can't do it, you would ring somewhere else, so tests like that are never fool proof. I am still of the opinion that what I said earlier in my post should be more correct to the sub contractor/PAYE thing; the how many people do you work for and how much thing.

This post has been edited by JDP: 25 October 2008 - 10:07 PM

[paulears]

Not sure if this is linked or not - but I'm helping a friend with her HMRC stuff. Mine is fine and has been delved into by HMRC inspectors and they are happy with how I'm set up, but I tried to do the on-line notification of self-employment status for my friend, and to my surprise one of the drop down boxes was entertainer - which she is. If you select it your on-line process stops and you have to contact them by telephone. I very much suspect that she will fail the test for self-employment. She works at a single venue, on a Warner's contract that lays down quite strict times and rules. However, Warners deal with the band leader - he splits the pay four ways. I reckon that he will discover he is actually the employer of the band members, and should have been PAYE'ing and NI'ing. This would be odd, as as employees, they'd also have employers NI deductions enforced, but as a kind of 'co-op', these would have to be taken out of the pot before the 4 way split - effectively meaning they pay the total employee and employer NI which is pretty steep.

I'm going to suggest she sees an accountant pretty quickly.

[indyld]

lightnix, on 26 Oct 2008, 7:25 AM, said:

HMRC aside, I've been wondering for a long time now (years, in fact), as to how long the "self-employed" freelancer / sub-contractor model can adequately serve the needs of the business, in terms of offering the quality and consistency of service required in today's business environment.

I understand where you're coming from Nick. But clients can't have it all ways.

In the corporate events market, the end clients want to organise shows suddenly in a few days. Phones ring, kit gets booked, people manage their time. With luck they will get a decent event with a good level of service and that is due in no small part to the can-do attitude of the production companies and their freelancers.

You can't have rapid responses, quality AND consistency of service. I have just done a roadshow of O2 that was pulled together in a week. Not one of the legs had exactly the same crew, in fact we hardly had the same graphics op twice. And don't even get me started about the venues they were able to book at such short notice. The shows went well due the professionalism of the crew - as usual.

Make your lead times longer, your pre production budgets better (not yours, Nick). The freelancer model is a product of the market, not some poor offering to businesses and their clients who deserve better. If companies have issue with the model, they need to change the way they do business and stop using casual labour with a posh title.

Otherwise, the savvy freelancers among us with start to consider whether the model serves the need of OUR businesses, as I suspect you have done yourself.

This post has been edited by indyld: 26 October 2008 - 08:36 AM

[David Lee]

Quote

And some naughty 'freelancers' who have full time jobs, and 'freelance' on the side

There is nothing wrong with tha, as long as it is all declared and Tax etc paid up.

There has been talk of if "freelancers" are truly self employed in this industry for a while now, and TBH and rather somebody else took the hassle away from me scrabbling around in Jan and June coming up with the money

[indyld]

On the subject of the HMRC and labour only sub contractors.

We've been through a certain amount of tightening up on this before and the large employers (who I feel are the most guilty of using casual labour and treating them incorrectly for tax purposes) did things to try and wriggle out. If things get even tighter, surely it will happen again.

I can think of an easy example. All lighting companies get rid of their lighting consoles or sell them to the operators. The companies then have to employ the services of a freelance Lighting Operator because they are the only ones who have the relevant equipment.

Perhaps all lampies should go out and buy a PAR can!

This post has been edited by indyld: 26 October 2008 - 09:04 AM

[JDP]

lightnix, on 26 Oct 2008, 11:09 AM, said:

David Lee, on 26 Oct 2008, 8:50 AM, said:

Quote

And some naughty 'freelancers' who have full time jobs, and 'freelance' on the side

There is nothing wrong with tha...

Yes there is. As discussed in other threads: the fact that they have the cushion of a full time wage to fall back on, means that they frequently (if not always) undercut the rates of those who rely on their freelance income to make their living. This adds further downward pressure on rates, which are arguably not high enough already. Also, the Moonlighters frequently do not carry any PLI and are therefore a form of cowboy labour IMO.

EXACTLY, I am thinking of one person in particular. This person is one of the SENIOR technical people in a big London venue, he has NO PLI, works cheaply (does 18 hour days for £180), and has a job that HE can set his own hours into depending on the venues schedule. This person works for at least two companies on a 'freelance' basis, and he is 'properly' full time, so there is NO WAY he is paying tax on what he is doing. And conveniently enough for him, as he can schedule in his own times, so he can do as many freelance jobs as he wants, and he probably claims overtime at his full time job. Makes me SICK, I know of several A-List freelancers who do work for 3 of the biggest rock n roll companies who have no work on at the moment, and this **** is doing at least 3 jobs at the moment on his 'freelance' basis.

Theres also the fact this person is a senior technical person, and he FREQUENTLY puts his in house technicians on these 'freelance' jobs, to the extent, I know a job he is using his 'own' crew from this venue, and its nothing to do with the venue - yet this job is in a BIG London venue that will have this crew in, the crew are NOT PLI'd up, paying no tax on the job, and undercutting every other freelance technician.

Nick, I can't even begin to explain my anger about this! It makes my blood boil. This crew aren't even any good, and could do no way near the job the A-List freelancers could, who are sat at home, meanwhile this 'crew' take their time off (because the main man is a big cheese in the venue and can arrange it) to do this job. Absolutely shameful, if someone can tell me how and who to, I seriously will report the lot of them!

[tvi675]

lightnix, on 26 Oct 2008, 11:09 AM, said:

David Lee, on 26 Oct 2008, 8:50 AM, said:

Quote

And some naughty 'freelancers' who have full time jobs, and 'freelance' on the side

There is nothing wrong with tha...

Yes there is. As discussed in other threads: the fact that they have the cushion of a full time wage to fall back on, means that they frequently (if not always) undercut the rates of those who rely on their freelance income to make their living. This adds further downward pressure on rates, which are arguably not high enough already. Also, the Moonlighters frequently do not carry any PLI and are therefore a form of cowboy labour IMO.

This is the situation that I'm in, working full time for a manufacturer but freelancing on the side. This doesn't however, mean that I'm prepared to cut my rates to get the freelance work because I have the full time wage to rely on. In fact, working full time is more of an incentive to ensure I'm getting decent rates as why would I want to work full time Monday-Friday (with out of hours, homework, etc), and then go and work somewhere else in my precious free time for half the going rate?

Also, I've got £2m PLI, PPE, tools, and carry out all the necessary H&S checks, paperwork, etc.

So maybe I'm an exception to the rule, however I feel that not all moonlighters are cowboys!

[JDP]

tvi675, on 26 Oct 2008, 2:46 PM, said:

lightnix, on 26 Oct 2008, 11:09 AM, said:

David Lee, on 26 Oct 2008, 8:50 AM, said:

Quote

And some naughty 'freelancers' who have full time jobs, and 'freelance' on the side

There is nothing wrong with tha...

Yes there is. As discussed in other threads: the fact that they have the cushion of a full time wage to fall back on, means that they frequently (if not always) undercut the rates of those who rely on their freelance income to make their living. This adds further downward pressure on rates, which are arguably not high enough already. Also, the Moonlighters frequently do not carry any PLI and are therefore a form of cowboy labour IMO.

This is the situation that I'm in, working full time for a manufacturer but freelancing on the side. This doesn't however, mean that I'm prepared to cut my rates to get the freelance work because I have the full time wage to rely on. In fact, working full time is more of an incentive to ensure I'm getting decent rates as why would I want to work full time Monday-Friday (with out of hours, homework, etc), and then go and work somewhere else in my precious free time for half the going rate?

Also, I've got £2m PLI, PPE, tools, and carry out all the necessary H&S checks, paperwork, etc.

So maybe I'm an exception to the rule, however I feel that not all moonlighters are cowboys!

I feel your missing the point. The fact here, is you have a DAY job which you make your living on, then go and work (instead of some other freelancer) on a job. Regardless of how much tax you pay, or how much PLI you have, the point is, to do that freelance job, you have done someone else out of work, the someone else most likely a freelancer who make their living on working - meanwhile you have a day time job you can do, so the freelancing is just extra cash in your pocket... That more than anything else is why this is very, very annoying for true freelancers that don't have full time jobs to make their living from.

[paulears]

I think JDP is talking a lot of sense here. In fact, I did exactly this for quite a few years, and could undercut most of the usual firms on hiring kit because they also got me free. When I made the decision to give up the nice safety blanket and actually use my earned income to eat, it was a shock. I could no longer charge for me OR the kit, it had to be me AND the kit. I lost a few clients, who switched back to the usual sources - and it made me realise how fickle people are. I thought they used me because I was good (and cheap), but the reality was that they used me because I was cheap - the good bit was a bonus.

I've used a lot of freelancers in the past few years and always try to put work to the people who don't have 'proper' jobs. JDP is quite right - I now appreciate the very problems he talked about, but gave it scant thought before.

When I had the nice cushion, I was pretty much against unions, associations and restrictive rules on employment. Odd how in just a few years my attitude has done a 180.

[slim_mcslim]

I think what the HMRC want is all temporary employees to be taken on and paid via PAYE with maximum deductions for both NI and TAX. It is perfectly possible for freelancers to still be "freelance" whilst employed in this fashion, it just means a whole lot of administration for employers.

Which means that when attempting to book a freelance tech. you will have to explain that you can only pay them via PAYE which in turn, instead of them invoicing you for £200 you have to pay them somewhere in the region of £163 (I don't know the exact figures) so the freelance tech will end up feeling hard done by so I feel that they will also become harder to come by.

All of which quite frankly I don't fancy...