ITV's annual report for 2024 showed that £61m has been set aside in case the broadcaster faces tax liability related to its use of freelance workers and contractors.
Due to ongoing reviews by HMRC, the final amount payable could be significantly different to the amount set aside, the broadcaster has reported.
Following correct payment procedures for freelance and contract workers should not be a tick-box exercise, stated Seb Maley, CEO of insurance specialists Qdos.
He told HR magazine: “There are a number of factors to consider when making sure you’re engaging a freelancer or contractor compliantly, from carrying out rigorous IR35 status assessments to ensure an individual is engaged under the correct employment status through to ensuring compliance across the labour supply chain. Standing back, though, it’s about giving the off-payroll working rules the time and resources they deserve.”
Read more: Sports pundit must pay £300,000 after losing IR35 appeal
Separately, whistleblowers have come forward with allegations against a subcontractor of the rail network HS2, relating to falsified payslips, the i newspaper revealed on Sunday (25 May).
The whistleblowers alleged that the subcontractor had been falsely declaring self-employed workers as pay-as-you-earn (PAYE) salaried staff, charging an inflated rate for them and submitting falsified payslips, according to the i newspaper's report.
HR leaders should establish clear and defined policies to ensure that employers are complying with tax rules, added Nick Bustin, head of employment tax at accountancy and tax advisory firm HaysMac.
Speaking to HR magazine, he said: “Ideally, engagements need to be reviewed on a case by case basis, considering not only the written terms of any contract but how the arrangement works in practice. HR leaders should look at establishing a clearly defined policy, which will help engagers within the business to reach a decision as to whether a contract for services or a contract of services is being provided.
“HR leaders need to ensure they are aware of all the contracts that are being issued to new workers, and that they have a clear understanding as to how each engagement is going to be executed. It is essential that HR leaders are proactive, ensuring all contracts are up-to-date and reviewed in light of the latest developments. For many organisations this will be no small task. Up-to-date training on the ever-evolving tax and employment law issues needs to be introduced.”
Read more: Gary Lineker wins appeal against £4.9 million IR35 bill
HR leaders should also consider what might happen when not following correct payroll procedures, stressed Paul Newsham, CEO of the Payroll Compliance Authority, a not-for-profit accreditor in the outsourced payroll sector.
Newsham told HR magazine: “Each of these cases is yet another reminder of the importance for HR departments to ensure they are adhering both to current employment legislation and taxation guidelines. The first thing is to consider the consequences of not following correct procedure. Time constraints can often put pressure on busy HR leaders and managers, and this can have serious implications.
“If there is not enough time allocated to performing certain checks and balances, mistakes can easily happen that could be detrimental to the company from both a legal and contractor satisfaction perspective. Not to mention adding to the administrative burden of the HR team over the longer term.
“It all comes down to prevention rather than cure. We see all too often companies scrambling to tackle the problems that arise when it comes to light that the processes they have in place are evidently unfit for purpose. Instead, they should be anticipating such issues before they happen which is where having a robust accreditation process in place.”
