ITV’s Loose Women IR35 fiasco shows how severely the off-payroll rules have gone off target

It’s a brave move because it potentially puts their prospects and take-home pay at risk, but last week two well-known Loose Women presenters reportedly refused to sign new contracts, potentially jeopardising the future of the popular daytime TV show.

Why won’t the two sign the contracts, and why have they both reportedly now left Loose Women as a result? It’s all because ITV are insisting that each moves to PAYE despite the presenters operating as independent freelancers for many years.

This, of course, all boils down to IR35 and it serves as a good example of the wider problems created by the unwieldy legislation, writes Andy Chamberlain, director of policy at The Association of Independent Professionals and the Self-Employed (IPSE).

Long, independent, respected freelance career? Still, sign this PAYE contract…

The two presenters, Janet Street-Porter and Jane Moore are very well-established freelance journalists. Both have had long careers working with a range of publications and broadcasters. Both have a public profile, and will undoubtedly take audiences with them when they work on new projects. It could be argued that each of them is a brand in their own right.

According to reports, ITV has presented them with a contract that says they are not freelance; most certainly are not a brand, and which restricts their ability to work for other ‘clients.’ Essentially it’s something close to an employment contract but – again according to reports – it doesn’t offer employment benefits such as holiday pay. It’s a tale which is all too familiar to thousands of contractors, across all sectors of the economy.

A UK-wide back-turning on entrepreneurialism, and our government is doing nothing about it

Since the introduction of the off-payroll working rules on April 6th 2021 (and April 6th 2017 in the public sector) clients, who must now shoulder the responsibility of making IR35 determinations, have turned their backs on the freelancers who have served them so well, for so long.

So scared are UK employers of getting the IR35 decision wrong, or worse still, getting it right but not aligned to HMRC’s view of status, that they have implemented blanket bans on incorporated freelancers. Everyone has to be on payroll, regardless of the actual status of the engagements. It’s probably the biggest one in the eye of entrepreneurship in living memory.

But this high-profile dispute - which is playing out over just two contracts on just one tele show at just one broadcaster - is actually a drop in the ocean.

If it’s a ‘No,’ it's ‘IR35’

The same argument has been had thousands of times since the IR35 rules changed and with similar impacts. Independent professionals who genuinely work on a self-employed basis are being told ‘no – you can’t work like that anymore.’

Even when it benefits both the individual and the client, even when the role is crying out for a freelancer, even when freelancing is a well-established industry norm, the answer is still ‘no.’ And you know what; it’s all down to IR35.

An additional aggravating factor that must be considered is HMRC’s stubborn enforcement of the IR35 rules. Clients and agencies are no doubt reluctant to provide an ‘outside IR35’ determination because they can see just how dogged HMRC is when pursuing an IR35 case.

Coincidence -- it is not, but former Loose Women host Kaye Adams, fended off HMRC albeit only after undergoing FOUR tribunals – yes, FOUR.

You, or Kaye Adams, versus an unaccountable govt department? Good luck with that

HMRC failed to win a single one of the tribunals where her status was in dispute, but that didn’t stop HMRC trying again, and again, and again – supported by a bottomless pit of taxpayers money to throw at the huge legal costs involved. As Kaye Adams has said, “HMRC has the bottomless pit of the taxpayers’ purse.”

And worryingly, as former leader of the Conservatives Sir Iain Duncan Smith warned in the House of Commons last month; “HMRC is unaccountable; it is the only department that does not publish accounts every year, so there is no scrutiny of moneys lost or failed to be gained.”

Ms Adams won her case, and mercifully has now received confirmation that her ordeal is over.

But it has taken nine long years, presumably endless correspondence, and a considerable amount of money to get there – just for Adams to obtain, in effect and not that HMRC will explicitly confirm it for her, ‘Yes, you are freelance; just as you said you were.’

Side-effects of Loose Women IR35/contract fiasco

The side-effects of this nine-year battle, costing hundreds of thousands of pounds? Clients such as ITV will have taken careful note. Even when the courts are saying IR35 doesn’t apply, HMRC still insists that it does.

No one wants to be dragged through tribunal after tribunal even if they know they are right.  

And ITV, it seems, would prefer to part ways with the talent that makes their products, than incur the wrath of HMRC.

Something has gone badly wrong

This year’s general election will provide an opportunity for the incoming government to look once again at the IR35 rules and OPW reforms, and consider whether they are really working as they should do.

Is IR35 supposed to act as a deterrent to freelancing? Even if the individuals involved are clearly freelancers; even if they want to work independently; even if the organisations they work with want to engage freelancers? And even in industries that have been built on the freelance model and where such B2B engagements clearly work? The answer to all of the above must be ‘No’. IR35 is supposed to deter disguised employment, not genuine freelancing, but something has gone badly wrong.

If the UK wants to get out of the economic slump we find ourselves in we must create an environment where genuine freelancing can flourish and where clients aren’t terrified to engage freelancers and contractors. That’s the message IPSE will be taking to all the parties ahead of the election.