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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Particular occupations: entertainment industry - film and video workers - use of service company

To avoid PAYE and Class 1 NICs liability, many film and video workers in ‘employed’ grades have set up limited companies. Normally the worker is the majority shareholder and a director. It is usually alleged that the service company supplies the services of the individual to a film or video production company.

An examination of many such cases has shown that such arrangements often fail. The worker remains an employee of the production company. Tell the Film and Video Production Unit about any service companies of this kind that you find.

Where the worker is not an employee of the production company, you should consider whether the ‘service company’ legislation applies (see ESM3000 onwards).