Photo credits: ITV
The 2019 series of Love Island on ITV runs until the end of July, so don’t panic, it has only just begun.
However, many of you watching this year’s show will already be trying to guess what the contestants might go on to do next, and who will be successful when the cameras stop rolling.
Whilst the cynics among us will see such reality TV shows like Love Island as just one big holiday, and I’m sure at times they are, but the reality the contestants actually face when the show comes to an end is a really hard industry; its difficult to maintain a place in the spotlight.
So why are a firm of accountants, writing a blog about Love Island?
First of all, behind the sparkling white teeth and tans, the Love Island contestants will be approaching the show as a business proposition and will have a plan. The show is the first stepping stone of their plan, and they will know what is going to make them popular in the show, (perhaps we steer clear from any detail here). They will also be well aware of what will need to happen in a really short space of time after they have left the show and become famous.
From getting a celebrity manager to the all-important sponsored Instagram posts and talk-show guest appearances, some will also go on to present and host similar TV and entertainment shows; the real work begins after the show.
In addition to their business-focused approach, the now famous reality TV stars may be lucky enough to accumulate several different sources of income and most of the time, this will be on the basis of them working in the business on their own account, through their own personal service company. They will then need to take account of tax on this income and instruct tax advisors to guide them through the maze of accounting and tax terminology and rules; to help them stay on the straight and narrow but at the same time be as tax efficient as possible.
What do the IR35 rules have to do with Love Island?
Why this is even more topical for this year’s contestants is the tax changes faced by freelancers and those working through their own personal service companies. The public sector has seen compulsory change and the onus is now on the public bodies to ensure their off payroll workers are assessed for tax purposes and put onto the payroll if they are found to not be in business on their own account.
The private sector is to be hit by the same compulsory rules in April 2020 and therefore, there will be far more scrutiny over how income should be taxed. HMRC used to consider multiple income streams as favourable, and they can still do so, but they will now look far closer at each income stream in isolation, to assess if the work was undertaken as an employee with direction, supervision and control, amongst other things such as financial risk and being able to provide a substitute.
How this year’s contestants undertake roles presented to them after the show and the supporting contracts, will be critical to how they will be taxed on this income. They should, therefore, think carefully about ensuring they have a good business advisor as well as a good manager.
Are you a freelancer and need help with your tax position?
If you are a freelancer or contractor and work as a sole trader, partnership or through your own personal service company, then please contact us by email or on 01295 250401, to fully understand the impact these rules will have on your tax position.