LP10 letter

An LP10 letter is a letter sent by HMRC that instructs your short-term employer or contractor not to deduct tax from your earnings. 

Here are a few things for you to bear in mind about an LP10 letter:

• It is also referred to as a Lorimer letter based on the Hall v Lorimer case in 1993
• You apply it to work that lasts 10 days or less
• You need evidence of multiple examples of these short-term jobs to apply
• It helps your employer to clarify your employment status (employed or self-employed)
• It assures your hiring company that you can be paid gross income

Who might use an LP10 letter?

Some freelancers are often in job roles that would usually be paid PAYE, meaning tax is taken off by their contractor whenever they work. This is frustrating for them, as these jobs are often short-term roles – sometimes only a few days work. Being paid PAYE means the freelancers are usually over-taxed for the whole year and don’t get a tax rebate until the end of the tax year (5th April).

LP10 letters allow freelancers to be given special permission from HMRC to be paid as sole traders for these short-term jobs. As a result, they’re common for those who work in the film and television production space, especially if you work behind the camera.

How do I apply for an LP10 letter?

To apply, you can get in contact with HMRC who can issue you with a letter that you will show to short-term employers:

• You’ll need to show 12 months of employment history
• The letter is valid for 3 years, after which you’ll need to reapply
• You must also contact National Insurance on 0300-200-3500 

With the introduction of the IR35 changes that came into force in April 2021, this process could change. To make sure you keep on top of IR35 changes, keep an eye on the HMRC website for updates.