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- April 19, 2018 at 9:44 AM #97341SnouterMember
I'm a university student currently doing a report titled; Explain the advantages and disadvantages of Sole Traders and Limited companies and I'm using the film industry as an example to work with. I want to ask the following questions; What role do you play in the industry and are you/would you be a Sole Trader or Limited Company? Why is this? Please leave any answers in the comments below.
Well – I'm a sole trader, but of course in our industry this is called freelance – (but one man band Ltd companies also are freelancers).
I describe myself now as a Production Manager, but the reality is I do loads of things – most based around music and the performing arts. I can be on stage, or operate in a variety of roles – video, lighting, sound etc. I have video and audio studios at my home, built in an extension at the rear. I can and do work for a lot of different people during the year. I'm VAT registered, and while I don't get sick pay, pensions, holiday pay etc, I'm my own boss and self-employment works for me. A Ltd company was always an option, but my accountant thought it less good for my circumstances and the bottom line. I can say no if I wish to jobs I don't fancy. For me, being able to offset my business expenses against my income works really well, and minimises my tax. I'm getting on – so income chasing is not my priority, and I can afford to choose interesting work. If I was. Ltd company with the same turnover, my accountancy charges would be higher, and my personal tax liability would be coupled with corporation tax. I'd have to pay PAYE on any salary paid, and probably minimise that and consider dividends which would need my accountant to constantly advise. The record keeping and returns to Companies House I could do, but frankly I don't want to.
Nowadays, HMRC are very wary of video people being self-employed because it's often not really self-employment at all, just a great way for a company to shed staff responsibility and lower their tax liability. HMRC don't like video self-employed people. They don't seem to mind me because I am spread across more range of activities. A cameraman, who was employed by XYZ studios, and suddenly becomes self-employed with XYZ as their only client is suspicious. Rightly so really? Can they choose to not go in, and send somebody else without notice? Is their equipment provided? This kind of cheat is being hit. With me – clients tell me the event, I turn up with other people and do it with no input from the client. This is proper self-employment to me. I could be bla-bla Media Ltd, but being Paul Johnson, trading as bla bla media works perfectly well for me.
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