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Non-director services for your own Ltd Company

Can you intermittently invoice your own company for ad-hoc work in a non-director capacity

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I have a prospective client who needs to set up a limited company in order to apply for funding to make short films, and I'm trying to determine what is the best advice to give.

They are currently acting as a sole trader for their freelance work as a Lighting Technician and I wanted to know if they would be able to invoice the new Ltd company (that they will be a Director of) for their services as a Film Producer/Director, once they have magaged to secure the desired funding (which will be on a project-by-project basis)?

The Producer/Director services that they would provide for the Ltd company would be intermittant, as they are unlikely to know how much funding they will receive and when.

Also, would they be obliged to take some sort of salary as a company director, even if they are doing relatively little in this role?

The main motivation for setting up the Ltd company is to be eligible to apply for external funding, which would ideally be used to produce short films rather than paying a director's salary.

Or would it be best just to pay the director's salary and not take payment for Producer/Director services?

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By SXGuy
17th Sep 2019 08:37

So let me get this straight and correct me if im wrong.

Client wants to set up company to get funding.
Client wants to invoice company for work done as sole trader
Client wants to use company funding to pay for work done by client as sole trader.

So all the client wants a company for is to get the funding, and then everything else to be done as a sole trader? have you considered how similar both the company and client roles are?
Have you considered the tax implications of working as a sole trader compared to operating via his company?

Have you considered the tax implications of the company "loaning" the money to the client as a sole trader?

No, the client doesn't need to operate a paye scheme for the company.

I may have missed a few things, but it sounds like an awful set up to me, and appears as though the client will be paying more tax the way you want to do things than if they had just operated via the company for everything.

Thanks (1)
Replying to SXGuy:
By bromley.davis
17th Sep 2019 11:07

Thanks for the response.

I probably could have made it clearer.

All production costs would be going through the Ltd company (e.g. sound/lighting equipment, travel costs, filming permits etc.). The sole trader would only invoice for their time as Producer/Director on each project, which is likely to be a maximum of a week at a time.

It would essentially be a company producing short films, using external funding, with all costs and revenues relating to each film production project showing as income and expenses in the Ltd company. I wanted to know if, as a director, the client could invoice for their time as Producer/Director and not take any salary.

I think you may have answered that already but maybe this changes with what I have now said?

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By lesley.barnes
17th Sep 2019 09:51

I've seen this before with people making films/series for TV. The BBC used to do it. If its the same set up the company commissioning the project usually releases some funding upfront and then further funding on proof expenditure as work progresses. The commissioning company usually builds in a % allowance over and above expenses so the Director of the Company can take wages and dividends. Maybe that is were your client is coming from - if he pays himself as a freelancer he might be hoping the funder won't notice and will give a % uplift on this expenditure for his company? Word of warning - these companies are usually short lived because they rely on the external funding and the whim's of the funder once that dries up the company folds.

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