IR35 and Personal Service Companies for UK Freelance Journalists

What is IR35 and why does it matter to journalists?

IR35 is the informal name for rules in the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) designed to prevent tax avoidance by workers who provide services through an intermediary — most commonly a personal service company (PSC) — but who would be employees if engaged directly. The rules require that where an engagement is “inside IR35,” income tax and National Insurance Contributions (NICs) must be deducted as if the worker were employed.

For journalism, IR35 is most relevant to journalists who have set up a limited company through which they contract with publishers, broadcasters, or other media organisations. Sole-trader journalists — the majority of UK freelancers — are not within the IR35 regime, though HMRC can separately examine whether their arrangements constitute disguised employment.

Inside vs outside IR35: what it means for your take-home pay

The three key tests for IR35 status

• 1Mutuality of obligation: Is the client obliged to offer work and are you obliged to accept it? A genuine freelance arrangement has no obligation on either side — each commission is a separate contract. Long-term retainer arrangements with a single client and no right to refuse work point towards employment.
• 2Control: Does the client control where, when, how, and what you produce? A genuine journalist freelancer controls their own schedule, chooses their sources, and decides how to structure their work. A client who dictates daily hours, requires you to use their equipment, or directs your methodology is exercising control consistent with employment.
• 3Substitution: Can you send someone else to do the work? A genuine right of substitution — where you can provide another qualified journalist to complete the commission — is a strong indicator of self-employment. The right must be genuine, not merely theoretical: a clause in a contract that the client would never actually allow in practice is given limited weight.

The April 2021 changes: client responsibility for medium and large engagers

Before April 2021, contractors operating through a PSC were responsible for self-assessing their own IR35 status. Since 6 April 2021, for medium and large private-sector clients (those that do not meet the Companies Act small company test), responsibility for IR35 status determination has shifted to the end client. The client must issue a Status Determination Statement (SDS) for each engagement, and if the determination is “inside IR35,” the fee payer in the chain must operate PAYE on the payments.

In practice, many large media groups issued blanket “inside IR35” determinations for all contractor engagements after April 2021, regardless of the individual circumstances of each engagement. Journalists who believe they have been incorrectly determined as inside IR35 can challenge the SDS by using the client's status disagreement process — clients are legally required to have one. If the client does not respond to a challenge within 45 days, the liability for any incorrect determination shifts to the client.

Common IR35 mistakes for journalist contractors

• ›Assuming a personal service company automatically reduces tax liability without considering whether IR35 applies to individual engagements.
• ›Not keeping records of CEST tool runs for each significant engagement — if HMRC investigates, you need to show the determination and the inputs used.
• ›Accepting a blanket inside-IR35 determination from a large media client without challenging it — each engagement should be assessed on its own facts.
• ›Including a substitution right in a contract that both parties know would never be exercised in practice — HMRC looks at the reality of the working arrangement, not just the written contract.
• ›Running a PSC for a single, long-term client engagement with no other clients — this pattern is most likely to attract HMRC scrutiny.

Related guides

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Frequently asked questions