The growing film and TV industries in the UK are overwhelmingly reliant on what we could call “a contingent army.” A workforce of people who are engaged, on precarious employment terms, and on a contingency basis – hired and let go as soon as they have outlived their usefulness to their engagers.
Many of the people who are engaged for months on end by the same engager still have many other characteristics of self-employment, due to the levels of risk that they take on, and the independent manner in which to do much of their work.
It is a dynamic industry that can come together for a new project in a way that is almost spontaneous (in comparison to many other enterprises). When a production grinds into motion, a lot of people converge onto a studio space and the kind of supporting facilities that contribute to a production.
The concept of self-employment is, as was noted during the landmark Hall v Lorimer case of 1993, a difficult one. When assessing workers to determine their employment status, many productions are using the ‘Check Employment Status for Tax’ (CEST) test that has been deployed by HMRC.
If you look at the picture of a horse (above – you can see the horse, right?) CEST attempts to do a job that may actually be too complex for any Q&A-based tool.
CEST breaks down self-employment into a series of questions and a lot of the ‘brush strokes’ that the test puts on the page in relation to a particular worker do look more like “employment” than “self-employment”. But if you look at the whole set of relationships in a workforce that is, effectively, a ‘contingent army’ running the film industry, the big picture – when you step back from the picture – is often one that shows that “these people are largely self-employed – no matter what the CEST test says.”
For this reason, Bectu would argue that our industry needs to engage more with HMRC on the design of the CEST tool with the ‘contingent army’ nature of our industry in mind. The union will not advise people to take on a ‘self-employed’ tax status that has illusory benefits where it is not appropriate to do so, and it will not encourage tax avoidance. The union will advocate for people who have a genuine reason to have a self-employed mode of working. In some cases, we have seen members who have completed CEST tests, had ‘indeterminate’ results – they looked quite like an employee in some respects, but they have multiple and overlapping engagements making a PAYE arrangement on all – or even some – of those jobs quite unmanageable.
A closer look at the nature of this ‘contingent army’ should illustrate the union’s concerns here.
‘The Squad System’
They will have been recruited by word of mouth, often ‘squad members’ of a few loose, informal teams based around a particular ‘Head of Departments’ (HODs) – a Director of Photography perhaps, or a Costume Designer, Sound Mixer, Gaffer, or Key Grip for example.
Those HODs will have a shortlist of people that they know and trust, who will in turn bring their own associates. People can be added and dropped from these ‘squads’ without any ceremony.
The team that is picked by this informal process are nominally engaged by the production company, but they are largely dependent on the goodwill of their team leadership to get – and keep – their work. In surveys, some Bectu members complain of a ‘freemasonry’ that results in a lot of bullying of the ‘when I say “jump”, you say “how high?”’ nature. People can lose large blocks of expected work on a whim, or due to a failure to appease arbitrary demands.
There is almost never any ‘mutuality of obligation’. You are hired for one job at a time with no guarantees of further engagements on either side. You are often judged to be ‘only good as your last job’. There’s no career ladder – you often even risk being overtaken and demoted by new technology.
Unlike employees, they don’t have any performance management processes that determine whether they keep their jobs. They can be dismissed on a whim in many cases. They are expected to be very dedicated to their craft.
The standard shooting day on a feature film or most TV Dramas lasts 11 hours with an additional unpaid hour for lunch. In many cases, they’re also expected to arrive an hour or so earlier than that (for ‘prep’) or to wait behind for up to an hour (‘wrap/de-rig’).
Their hours also vary and are unpredictable. ‘Early Calls’ (a pre-6am start) and ‘night work’ (finishing after midnight) is not uncommon. The legal eleven-hour break between shifts is hard to enforce with employers and often ignored, and there is no practical way that these workers can challenge this beyond refusing to take the work or acting in concert with colleagues to enforce a union agreement.
They wouldn’t expect to be closely supervised, and if their work isn’t consistently up to scratch, they just lose the job at short notice, with very few obstacles or protections in comparison to people who see themselves as salaried employees. They take a huge risk each time they work because one badly handled engagement can result in almost instant unemployment and a badly damaged reputation. The phone will stop ringing for them with new offers, and they will need to persuade a new network of potential colleagues to accept them.
Getting established in a few of these ‘squads’ involves a lot of networking – participation in online, and WhatsApp groups, perhaps a personal website, or entries in industry handbooks such as Kays, or The Knowledge. When these aren’t the case, they still normally have to spend time on the phone, putting themselves out there. These networks evaluate and spread these skills.
It is in this context, the question asked in the HMRC CEST test about if your client “has a right to reject a substitute” is the wrong question. The answer that most people in the industry will give to this question will lean their answer towards ‘employee’ when the big picture is really one of self-employment.
Hitting the ground running – supervision direction and control
This kind of networking is essential for other reasons too. This is a fast-moving industry trying new technologies all the time. They will often need to own this technology themselves with large numbers of these workers owning thousands, or even tens of thousands of pounds worth of equipment that they supply to engagers as required. In some cases, the value of this kit can run well into six figures.
These people rarely receive any paid-for training from the companies that engage them, and the ‘contingent workforce’ nature of the industry disincentivises employers from providing training in the first place. In so many ways, they have all the downsides of being an employee with none of the upsides.
They are expected to learn ‘on the job’ and will be hired precisely because they have made this investment, and they don’t need much by way of detailed supervision, direction, or control (or ‘management overhead’). Networking is work. It is an investment that is not directly remunerated by any engager.
Every engagement that they work on is finite. A major motion picture may engage a lot of crew for a longer period of time – occasionally longer than a year – but the norm is much shorter engagements often months, weeks, or even daily contracts. It is not uncommon for workers to work on overlapping jobs where the work is done for a number of employers.
When working on a production of this kind, you are expected to hit the ground running. The companies they work for will often be special-purpose vehicles that have recently been established to get one production out of the door before the company closes.
There will generally not be an HR function that most established employees would recognise – more a contract-processing and payroll team. No induction. No training in the company’s ways and means. No company handbook or run-through of the company’s policies. No ‘Employee Assistance Programme’. No company culture to learn about.
This is an industry that relies upon a workforce who can be expected to know what to do from day one. They expect to arrive ready to do a job that they specialise in. They have paid for their own training. They have maintained skills and contacts at their own expense. If they spend too much time bothering colleagues about how to do their job, they will find themselves looking for a new one. In some cases, there are workers who have ‘assistant’ in their job title (often a historical hangover) but in many cases, the reality is that they would be expected to work independently for most of the engagement with ‘co-ordination with’ being a better term than ‘supervision’ to describe the relationship they have with colleagues, and senior members of their team.
Arriving ready to start work
They will often be expected to arrive on their first day of paid work, having prepared for different scenarios, having already done some investigation work. A 2nd Assistant Sound, for example, may have had to look at the script and get a good idea of timings and practicalities in preparation for the attachment of radio mics in crowd scenes. They may have contacted the Costume team in the days leading up to their start date to discuss this. Sometimes they will be paid for ‘prep’ – but other times they are expected to include it as part of the service.
Sometimes they will also be supplying equipment and charging for it. In cases like this, they will need to spend unpaid time maintaining and configuring it for the work they’re expected to do. More often still, they will be expected to arrive equipped and expected to provide that equipment at no cost.
Many members of crew, as professionals, may need equipment in their lock-up for contingency purposes, or for some of the lower-budget productions that they work on.
There will be production workers who have equipment to the value of a five-figure sum that they need to be professionals in this sector who will answer ‘no’ to the question on the CEST test that asks is if the engager expects them to buy equipment or materials before payments will be made.
They are not shown to their desk and logged into the PC that the IT Department has provided – they bring their own laptop – sometimes a high-end one that is needed for the kind of job they do. They may bring their own (high-end) headphones, drawing-tablet peripherals, and software.
Their email address is not going to be firstname.lastname@example.org – it will be their own Gmail or Hotmail one. Their phone is their own mobile which they may or may not be paid an allowance for. Sometimes they will need a car or a van to transport it. Unlike most employees who can choose between a bus or a scooter for their commute, they will be working on shorter contracts in different places, often expected to arrive with more equipment than that which can fit into a briefcase.
It is in this context, the question asked in the HMRC CEST test about if your client “has the right to decide how the work is done” is the wrong question. The answer that most people in the industry will give to this question will lean their answer towards ‘employee’ when the big picture is really one of self-employment.
The question of how far a client decides working hours will ignore all of the undeclared background work and preparation that production workers are expected to do. Assistant Directors (ADs) will be getting phone calls and emails during the evenings and weekends and they’ll be expected to fire up the laptop to juggle schedules when changing artist availabilities need to be accommodated.
When the CEST test asks if the client has the right to decide where you do the work, the answer many give will be ‘yes’ when the fact is some of the work is actually done in preparation, on the phone prior to the engagement, or during evenings and weekends. It is the nature of freelance working that a lot of this work is done without any fuss – creating the veneer of professionalism that is needed to secure the next job.
Work-life balance & ‘the commute’
Work-life balance is generally discussed in terms of flexible and manageable working hours. For workers arriving home 12 or 14 hours after they left, often working shooting schedules over weekends, this discussion is something of a sour joke in the industry. A social and family life is very hard to manage under these circumstances and Bectu has chronicled this extensively in its Eyes Half Shut campaign.
But there’s another important dimension to this that is largely unknown and uncommented on outside of this industry. One aspect of a good work-life balance is being able to choose the best place to live – to optimise commute times and balance them with housing costs and personal connections (schools, family, friends, etc).
Where many (most) employees chose their place of residency based on their employer, film and TV crew have a much harder set of choices. If they are working on productions outside of London, it can involve workers resident in Manchester working in Leeds or Sheffield. Workers in Scotland may have to travel across the central belt, doing the best they can with public transport, but usually opting for a car or a van.
If they are based in London, these workers may be working at Pinewood (near Slough) on one project, their next one may be a Leavesden (near Watford) or Three Mills (east London) and they will often be shooting ‘on location’ (which could be anywhere). Unlike many employees, they can’t pick an optimum location for their residency. The optimal place to live is near the centre of London and a taxi-train-tube combination from Pinewood can take a couple of hours with an 7am arrival and an 8pm finish planned.
It’s the worst of all worlds – high housing costs, low convenience. And yet, for tax purposes, these workers must treat each new Production Base as their place of work. They are unable to offset any of their ‘commute’ against tax, even though their journey to work is a great deal different from most people’s idea of a commute.
In this sector, most people will need to buy and maintain a car, or a van, even if there are days that they can do without it). This is a similar situation to the CEST test question about equipment. There will be production workers who own a car, or a van that they need to be professionals in this sector who will answer ‘no’ to the question on the CEST test that ask is if the engager expects them to fund vehicle costs before payments will be made.
When you are working a day that lasts 12 hours or more, there is barely an option to spend a couple of hours navigating the off-peak London Transport network either side of the working day. Conventional employees don’t expect their commute to be paid for by their employers and can’t offset their costs against tax, but for self-employed workers in film and TV, these costs take on a whole new dimension and forcing them to treat all journeys like a commute increases costs that really should be shared by engagers and/or treated as legitimate business expenses.
In summary, these people often regard themselves as being self-employed. They advertise in directories such as Kays or The Knowledge, they invoice for their work, they have a separate bank account to manage their work-finances, in some cases they may be VAT-registered. Bectu are concerned that many people who match this description will inadvertently be re-classified as employees by their engagers who wish to avoid the risk of a sanction from HMRC. Because they have a professional reputation to guard, there will be a lot of work that is done outside of the framework of any daily or weekly rate that they formally bill for.
These people will tell the CEST test that they are not paid a fixed price for the project they are working on, but in reality, the answer is very far from the answer to the question “is all of the work you are done paid for directly as a daily/weekly rate?” They will tell a CEST test that they fix mistakes in their usual hours, at their usual fee, but they have to invest in the fact that they don’t make mistakes – and making them has a very high cost that won’t be captured in the CEST framework for understanding self-employment.
Bectu has circulated drafts of a booklet that contains a list of job-titles that are very likely to carry many of the characteristics of self-employment. We urge employers to look at these job-titles and to do anything they can to work with people on a self-employed basis where it is fair and appropriate to do so.
It is not HMRC’s intention that people who are working in this way should be treated as employees and doing so will add costs and injustice to an industry that is central to the UK’s plans for growth.
There is a problem with the way IR35 is being managed in our industry though, and this is something that the union needs to engage with colleagues in the industry on.
Bectu would never promote the self-employed mode of working to anyone who doesn’t absolutely need to be using it. There is something of a myth that workers can keep a lot more of their revenue by being self-employed. In our experience, many of these supposed financial upsides are often illusory.
Examples the union has seen and advised on show that someone with less than £45k in revenues will actually keep less of that revenue when trading through a personal service company (PSC) once all of the costs are taken into account, and members with revenues of £65k will only be only marginally better off than someone with a PAYE salary (a figure barely worth the hassle of managing a company) of the same amount – and they will have to go through a lot of headaches, inconvenience and expense in trading through a PSC to get that benefit. (update: I’ve had some feedback on this paragraph from a friendly accountant – here).
In doing so, they will also have to sacrifice their employment rights – rights that people rarely value until they need them. This is always the case, but it was a particularly sharp shock in March 2020 when payrolled workers were put on furlough, and people trading through their own PSCs were left without any income.
In addition to this, Bectu is a union whose members believe in fair and progressive taxation. If a worker trading through a PSC is barely better off than a PAYE employee, HMRC are a lot worse off – they lose huge sums in National Insurance Contributions (NICs) and Employer NICs.
Even with the upside to HMRC of Corporation Taxes, in most cases HMRC will receive more than £10,000 (and in some cases, a lot more than £10,000) each year from someone working on PAYE terms over and above the sums they would receive from someone performing a very similar role and trading though a PSC. We understand the background to the IR35 changes and are very supportive of its overall aims while also pointing out that it has resulted in lots of individual injustices to Bectu members
To repeat the point made at the start of this article, the union will not advise people to take on a tax status that has illusory benefits, and it will not encourage tax avoidance. The union will advocate for people who have a genuine reason to have a self-employed mode of working. In some cases, we have seen members who have completed CEST tests, had ‘indeterminate’ results – they looked quite like an employee in some respects, but they have multiple and overlapping engagements making a PAYE arrangement on all – or even some – of those jobs quite unmanageable.