Talent Manager met with Government officials including a special advisor on Weds 27th May to address issues affecting the #forgottenfreelancers.
Specifically, we raised the 4 key cracks in the Government’s C-19 financial support schemes:
The £50k cap on eligibility for SEISS
The exclusion of dividends from calculation of actual earnings for those Personal Service Company directors looking to furlough themselves
The fact that many freelancers worked a combination of PAYE and Schedule D
People who had set up as Self-Employed in the last 12-18 months and therefore were either ineligible for SEISS or would receive only a tiny fraction of their real earnings under the scheme – and not enough to live on.
We also asked for a review of the latest guidance on dates for someone being eligible for furlough, pointing out that the new dates – while extending eligibility to people who had RTI submissions by the 19th March – had severed the lifeline for many people whose contracts expired in February on or before the 28th.
On the 4 ‘cracks’, we said that there were simple solutions to each:
Raising the £50k cap would be fairer – and bring it more in line with the Job Retention Scheme, which has no comparable cap. Raising it to £80k would give a lifeline to 90% of those Self Employed people who are currently getting no support at all. At the very least there should be some tapering so that someone earning £1 over the £50,000 cap was not cut loose altogether.
[NB we also queried a stat that had been quoted – to the TM and elsewhere – by officials saying that ‘’on average, self-employed people with more than £50,000 in profits have income of £200,000.’’ We asked where this stat came from, and whether they were not confusing ‘income’ with turnover or whether it was a statistical anomaly. They said they would check and come back to us.]
The Treasury has argued that it is too complicated to include dividends in calculations of real earnings of someone who has set up as a director of a Limited company. They say that, from tax returns it receives, HMRC cannot distinguish between ‘’genuine’’, actively earned income or, on the other hand, money that a person has received from dividends on investments (passive income). They argue that it would be wrong to allow the latter to be included when factoring the grant someone would receive from furloughing themselves. Having spoken to experienced media accountants, however, we argued that there was a simple solution: namely that the accountants could provide HMRC with a certified breakdown of an individual’s different income streams, enabling earned dividends to be included in any furloughing calculation.
We reiterated the fact that in the creative industries people are often required – by HMRC and employers – to work a combination of PAYE and self-employed roles. Given HMRC has information on both, it could – and should – allow both to be factored into calculations of average monthly earnings and that that would ensure many more families were able to survive.
The Government argues that allowing self-assessment tax returns for April 2020 to be included in eligibility for, and calculation of, SEISS would raise the risk of fraud. We argued that the same due diligence could be undertaken in reviewing returns – and payments under the SEISS for these people could even be delayed (on the basis that, if people at least know they are likely to receive some money they are better able to weather the drought.)
We emphasised that the need to fill these cracks was not a matter of charity or conscience or even just a question of fairness (the fact that the people falling through the cracks were mostly incredibly hard working, entrepreneurial, skilled professionals who had made the same tax contributions as PAYE people.)
Rather this was a matter of self-interested, industrial policy on the part of the Government: investing relatively modest amounts to support an industry which is one of the UK’s economic engines, that is leading the UK’s drive for global trade links beyond the EU, that is at the forefront of shaping the digital economy, and is exactly the sort of industry whose future sustainability and survival is crucial if the country has a hope of ever paying off the current national debt.
We pointed out that up to 50% of those currently working in the TV and film were considering leaving the industry, and that analysts have estimated that up to 50% of the creative sector could be ‘’wiped out’’ as a result of C-19. (Enders Analysis.)
While they were receptive to the recommendations we put forward, there was a strong sense that the Treasury was going to resist any substantive changes to the financial support offered for non-working freelancers.
Instead, they indicated their focus was on barriers to getting the economy going again, and specifically ways that Government could help support the resumption of production.
The TM raised the issue of production insurance, which DCMS said it was aware of and looking at.
They were also aware of the struggles for many freelancers and were interested to know if there were particular tipping points for people leaving the industry. TM said that each individual was different, but we relayed the stories of TM members who had said there were leaving or actively looking to leave for more stable professions. These included a Bafta winning PD, a senior casting producer, APs and producers all of whom looking for public sector or sales/ admin roles.
We also raised concerns that many freelancers have going forward – ie once production does resume in earnest.
In particular, we flagged fears of:
Downward pressure on budgets (for production companies) and rates (for freelancers)
The precariousness of a career in the TV and film industry and the sense that this was only going to get worse
The need for greater safeguards to be put in place for freelancers’ physical – and mental – wellbeing in the face of ever greater pressure on budgets and schedules
The fact that diversity in the TV and film industries was likely to be set back substantially without a concerted intervention.
A lack of industry wide leadership from broadcasters and major employers on behalf of their freelance lifeblood
The meeting ended with them asking for suggestions for how Government could help going forward.
We said we would get to them with practical suggestions from our community and stakeholders.