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.”
I understood that blanket determinations were NOT supposed to happen. Yet we see many firms doing that without any action being taken.
It seems HMRC don’t mind people flouting the rules when they collect more tax.
I’m also surprised to see clients producing an SDS before they know who they’re engaging – the selected consultant should be part of the determination process.
P.S. Be careful with contract T&Cs. A number of agencies are now trying to slip in clauses that get the contractor to “indemnify” the agency against various losses including tax, NI, interest, penmalties.
Essentially, the bandits are fobbing their IR35 responsibilities as fee-payer onto the contractor. I suggest no-one signs any such clauses.
Perhaps worse is that some of them don’t even bother to produce a defensible contract, so the likelihood of being deemed inside retrospectively is higher then normal.
A good rule of thumb for life: if you’re dealing with somsone whose job could be rooughly described as “agent” (even if they call themselves “recruitment consultant” or some such nonsense) then you’re dealing with a shark who will look after their own interests over any other consideration. Act accordingly.
Yah
Another HMRC own goal
I bet those presenters paid more taxes in total than as PAYE.
Still it shows that HMRC are prepared to chase down anyone,
well as long as your not a non Dom or have a fair few millions in the bank (offshore) or have any links to political parties or mates of any IMPORTANT people.
HMRC – the dept for ignoring tax evasion
Same old story, the megastars flout the “rules” and drop the rest of us hard work contractors in the the doggy do-da. IR35 is a big net with a very small mesh so us minnow get dragged along as well. IR35 never looked at the holistic tax paid by any of us. If you have a higher disposable income you spend it and then get taxed via VAT, stamp duty and the like. Guess what, spending money generates demand, jobs and all that downstream stuff, which in the end will generate additional tax revenues.
How is it correct for HMRC to state rules apply if most of income is from one source when previously they stated number of sources of income did not matter and that it was the contractual terms of each source that mattered? It could appear that things are being made up as they go along. How can anyone abide by rules where the definitions keep changing?
I wish my employer would offer to offset the additional taxation I have to pay under IR35
peter.moraghan@me.com. “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.”
That is not even the worst of it though. As we have been living with it for so long we sometimes lose track of the utter absurdity of the HMRC approach of that you have been assessed as being a disguised employee ….. so why do they have to pay Employer NI then … it makes zero sense. Either your are an employer or you are not.