IR35 Fallout: ITV Daytime Cuts and the £61m Tax Bill

ITV’s Cost-Saving Drive Meets Massive Tax Exposure

ITV has announced it will cut 200 staff from its Daytime department as part of significant cost-saving measures. At the core of these tough decisions lies a looming £61 million tax liability, revealed in ITV’s 2024 annual report. This liability is tied to HMRC’s claims regarding hiring practices—specifically, the use of sole traders and contractors engaged via intermediaries. The tax burden alone is double the amount ITV aims to save with these redundancies, completely negating recent operating profit gains.

“The £61m bill would wipe out the 11% increase in ITV’s EBITA year-on-year.”

The Impact of IR35 on Broadcasters and Creative Freelancers

HMRC’s enforcement of IR35 and off-payroll working rules represents a fundamental shift in employment and hiring practices within the UK’s creative industries:

• IR35 requires companies to assess contractors’ working status for tax
• Many freelancers are now classified as ‘deemed employees’
• Businesses face retrospective liabilities if contractors are misclassified

This tax environment has produced widespread anxiety across broadcasting. Companies like ITV must now weigh regulatory risk above business and creative needs. Key brands including ‘Lorraine’ and ‘Loose Women’ are seeing reduced output—up to two thirds in certain cases. Insiders describe the situation as a “bloodbath” for talent and production.

How IR35 Is Reshaping the Creative Sector

Traditionally, UK broadcasters relied on a flexible freelance workforce, enabling agility and expertise for diverse programming. IR35 fundamentally disrupts this model by:
• Dismantling freelance ecosystems
• Penalising use of genuine contractors without offering them employment rights
• Forcing costly compliance that drains creative investment budgets

Contractors lose autonomy, while full employment protection and job security remain out of reach. These changes undermine the adaptability that makes British media globally competitive.

Recent Developments in IR35 Enforcement

• Retrospective liabilities apply for misclassified sole traders (and, since 2012, for those via intermediaries)
• Notable high-profile cases (e.g., Gary Lineker, Kaye Adams) have highlighted systemic uncertainty

Key Data: ITV 2024 Financials at a Glance

Year	Potential Tax Bill	EBITA Increase	Staff Redundancies (Daytime)
2024	£61 million	11%	200

Industry Voices and Analysis

“IR35 has become a bureaucratic weapon that HMRC has wielded against businesses, after forcing MPs to implement legislation that fundamentally runs counter to how modern creative industries operate. ITV is haemorrhaging talent, axing programmes, and facing financial penalties that could have been put to better use.”

Industry experts warn that such tax policy threatens the sustainability of creative production across the UK. Freelancers now face less opportunity and greater uncertainty, while organisations must prioritise compliance over innovation.

The Broader Implications for UK Broadcasting

ITV’s tax situation is not just an isolated financial challenge—it signals a wider crisis affecting the creative sector as a whole. As broadcasters reckon with compliance costs, viewers could see a decline in content quality and diversity.

What Should Businesses Do?

• Review contractor engagement practices regularly to ensure IR35 compliance
• Consult with legal and tax experts on employment status determinations
• Stay apprised of changing regulations and recent case law

Failing to address these issues could leave organisations exposed to significant penalties and operational setbacks.

Conclusion: Is IR35 Destroying Creative Flexibility?

IR35 and related HMRC policies have tangible impacts on decisions ranging from talent retention to programme funding. The ITV experience is a cautionary tale: tax compliance, when implemented without industry sensitivity, threatens the very foundation of the UK’s world-leading creative sector.

Next Steps:

• If you contract in media or creative industries, reassess your status urgently.
• Organisations should proactively review their freelance arrangements and seek expert guidance.
• Stay engaged with industry updates to avoid becoming the next headline.