IR35 expert, Qdos, has responded to the news that ITV has set aside £61m as a provision for tax liabilities that could result from an off-payroll working rules enquiry. The organisation has described this provision as a development that “casts the spotlight on the staggering cost of non-compliance”.
In ITV’s Annual Reports & Accounts 2024, the broadcaster stated that the amount has been set aside if it is to be issued with a tax liability relating to “ongoing reviews by HMRC and court cases” regarding its engagement of freelancers and contractors, dating back to 2021.
It reveals: “The Committee considered updates from management on developments in the application of IR35 and status of ongoing discussions with HMRC regarding the tax status and treatment of ‘front of camera’ presenters who were not employees.
“During the latter part of 2024, the Committee considered management’s proposed changes to the provision recorded at 30 June 2024, updated to reflect ongoing discussions with HMRC, including the removal of certain prior years no longer in scope. Management proposed to classify those amounts related to prior years as exceptional, given their materiality and nature.”
In recent years, numerous high-profile freelance presenters engaged by ITV, in addition to the BBC, have been pursued by HMRC regarding their IR35 compliance. This includes Lorraine Kelly, Eamonn Holmes and Adrian Chiles, but also the likes of Gary Lineker, who was subject to an employment status investigation regarding his work with the BBC.
“First and foremost, this casts the spotlight firmly on the staggering cost of mismanaging the off-payroll working rules – not to mention the sheer length of time that these enquiries can drag on for,” said Qdos CEO, Seb Maley, “While ITV has set aside £61m as a provision only at this stage in the event it does need to be paid, it’s a wake-up call to other businesses – each of which should be doing everything in their power to engage freelancers and contractors by the book.
“In recent years, there’s been no shortage of high-profile IR35 investigations involving freelancers engaged by the likes of ITV but also the BBC,” Maley continues. “Following the introduction of the off-payroll rules, the shoe is now on the other foot – these organisations are responsible for determining IR35 status and in turn, carry the can from a tax perspective too.
“It means much of HMRC’s activity is focused on scrutinising the compliance of businesses,” concludes Maley. “You only need to look at the potential cost of getting things wrong as a reminder of the importance of compliance.”
