It is a difficult time for the acting industry with theatres closed and TV and film productions suspended, if not altogether cancelled. Unfortunately, despite their suggestions to the contrary, there is very little government support available to the talent in the industry.
There are two principle government schemes giving grants (i.e. “free money”) to working people:
- The Coronavirus Job Retention Scheme (CJRS) allows businesses to furlough their staff and claim 80% of the salary, up to £2,500 per month.
- The Self-Employed Income Support Scheme (SEISS) allows self-employed people up to 80% of their average monthly trading profits, with a lump sum paid worth three month’s salary, and capped at £7,500. This has subsequently been extended for a further three months at 70% and capped at £6,570.
A quick point: if you are able to access SEISS, please note that this is still taxable income.
On the face of it, this sounds great, but when we look at the details, some actors will struggle to access support. Firstly, the CJRS is only available to employees and most actors, besides perhaps the established soap actors, will be self-employed. The alternative, the SEISS is only available to the self-employed people who earn, on average, less than £50,000.
Consider this scenario. A young actor gets a decent part in a series a couple of years ago and made the following profits in the relevant tax years:
2016-17 – £20,000
2017-18 – £70,000
2018-19 – £70,000
However, the series was not renewed and profits for 2019-20 dropped back down to £20,000.
The 2018-19 tax year has profits greater than £50,000 and the average from 2016-19 is greater than £50,000 (£53,333), so this individual does not qualify for the grant, despite their recent income being lower in the year of coronavirus.
Income from acting is rarely predictable and consistent – there will be good years and bad years – so there will be many actors who do not qualify due to some success in recent time, even if subsequently they’ve earned less.
It could be worse. Perhaps the actor’s income is less than £50,000 on average but their accountant advised them that a limited company was the best structure. They take a small salary and pay the rest out as dividends. While there might have been modest tax savings at the time, there is no government support to replace the lost dividend income. And while the company director could furlough themselves and be paid 80% of their salary, this is unlikely going to amount to much, plus they’d be unable to actually work for the company to bring in any income.
The other support being offered by HMRC is typically in the form of loans or deferrals of tax payments. In the case of loans, including the Bounce Back Loan scheme, a lot of people are being rejected for these loans and it is not clear why, so, at the moment, it appears to be a bit of lottery. With the deferral of tax payments, this is only pushing the problem further down the line, so do not see it as free money – eventually HMRC will come knocking for it.
Do not forget, there are alternative ways to find income as an actor. Perhaps you could find work as a voice-over artist, which can easily be done at home, or you could even do tutoring for children who are unable to go to school (I am sure many parents would be happy to have their children distracted for an hour doing something creative). Also, there is always charitable support and other government benefits available if times really do get hard.
Finally, the good thing is with creative sorts is that they rarely sit around and do nothing. That screenplay you’ve been thinking of writing for years? Do it. Does your American accent need some work? You can spend some time practicing that ready for your Hollywood breakthrough. Or if you really can’t find anything better to do, how about getting onto preparing the information for your 2019-20 tax return rather than waiting for the 31 January 2021 deadline? If nothing else, this will give you an early indication of your tax liability and better allow you to budget your spending over the coming months.
If you want to discuss any of the above, or any other matter, just give us a call on 020 7183 3383 or email info@kma-spotlight.com.
