This is another one of those posts that are intended only as a general outline of the subjects covered. It shouldn’t be regarded as comprehensive nor sufficient for making decisions, and it should not be used in place of professional advice, but I hope it’s a useful starting point for members who want to know about Lorimer Letters.
Many Bectu members qualify for self-employed status mainly on the basis that they have a lot of multiple and overlapping engagements (i.e. that they are not only working for only one or two productions during the course of the year).
This is not to say that working for only a small number of engagers automatically means you are not self-employed. But such a pattern is a strong indicator that you are – and you may have many of the other characteristics of someone who actually is in full employment (complicated, isn’t it?).
For this reason, having a Lorimer Letter (or “LP10”) is very useful as it confirms that HMRC recognises your working patterns as those of someone who is self-employed.
If you have an LP10, it indicates that HMRC accepts you are self-employed, so no PAYE or National Insurance Contributions (NICs) need to be deducted from your earnings. Supplying an engager with an LP10 will often persuade them to treat you as a self-employed sole trader.
This may prove useful because the CEST test (that is otherwise used to check your employment status) looks mainly at the specific relationship a worker has with a specific engager, so it is possible that the engager will conclude that you are ‘caught’ by IR35 and you should be on-payroll even though the wider picture of your employment says otherwise, to the LP10 is a useful document to have.
One important update: In the past, LP10s were only issued to Self Employed Sole Traders, but since the IR35 changes were fully put in place, HMRC will now also issue these to people who are trading through their own Personal Service Company (PSC).
Your LP10 can be used on all engagements for as long as the letter is valid. So you can take the letter with you from job to job.
How to get an LP10
You need to contact the Film Production Unit at HMRC on…
- Tel: 0300 123 2326
- Email: firstname.lastname@example.org
…and request an LP10. They will then send you out a questionnaire, and a spreadsheet that you can fill in to list jobs that you have done in the last 12 months. This will help to show how many engagers you have worked with.
Once you have returned these, and HMRC are satisfied that you meet their criteria, they will issue you with an LP10. The LP10 will only last for one year, but you can request a replacement each year and they generally won’t ask you to complete the full application again before issuing it.
David Thomas (a Bectu partner small business adviser) has this page on his website with useful advice.