ITV’s new PAYE-only contracting policy sparks ‘chaos’
A recent policy update suggests ITV is looking to make freelance presenters work PAYE and will no longer engage them via a personal service company, according to a report by The Sun.
The move comes in light of IR35 reform in the private sector, which was introduced last year and shifted the responsibility for determining a contractor’s IR35 status away from the worker, to the medium or large business engaging them.
As a result, ITV has said that it has updated its contracting policy and “communicated the change to all those concerned”, emphasising that any assessments are done on a “case-by-case basis.”
Anne Robinson quits over new contract rules
However, one source told The Sun the move has “caused chaos” and meant a “total overhaul of the stars’ payment system”.
Anne Robinson quit as host of Channel 4’s Countdown last week after the show’s producers, Lifted Entertainment – part of ITV Studios – said she must operate via PAYE.
While the broadcaster offered her a pay increase to offset her tax loss, Robinson reportedly was not interested in any offer “on that basis.”
In recent years, many high-profile broadcasters – including Eammon Holmes, Gary Lineker and Kaye Adams – have been hit with huge IR35 bills and many of their cases are still ongoing.
HMRC’s approach to IR35 is ‘not fair’
Professor Jonathan Shalit OBE, CEO and founder of InterTalent – the agency which represents many presenters and producers, including Holmes, Kelly Brook and Ruth Davidson, said HMRC has been “putting pressure on all entertainment television employers” regarding the IR35 rules.
“According to its [HMRC] guidelines, if the majority of your income comes from one source – for example, a presenter earns 80 per cent of their income from ITV – they should be on PAYE as a full-time employee,” Shalit highlighted.
“There is a checklist of criteria when broadcasters should or should not be on PAYE – it is not correct to put all presenters on the payroll.
“ITV are just trying to cover their backs and ensure they don’t make errors that lead to a financial penalty.”
But, he added, HMRC’s approach to IR35 has “not been fair.”
“First, this is because it has not been consistent. And secondly, because if you are a presenter, you’re still not a full-time employee meaning that while you have the same deductions in your salary – national insurance and income tax – you get none of the benefits and protection employees get.”
Government urged to clarify IR35 rules
“It’s not fair that tax law is applied equally when not everyone has the same employment rights.”
Also speaking in response to ITV’s move, Andy Chamberlain, director of policy at IPSE, said: “Any organisation can choose to engage in its workforce in a way that it deems appropriate.
“However, within broadcasting, there has been a long tradition of self-employment and today’s decision from ITV could seriously damage the broadcaster as well as the careers of hundreds of presenters, producers and production assistants.
“While we understand the difficulties ITV and numerous other companies have in navigating IR35, putting freelancers on the payroll and potentially doubling their taxes could lead many to leave the organisation and go elsewhere.
“Instead, there needs to be action from the government in clarifying IR35, so that broadcasters like ITV are able to hire freelancers, without the threat of HMRC hanging over them.”