1. The Blanket Ban: Moving Everyone to Umbrella

This was the path of least resistance, and a significant number of broadcasters and production companies took it. Faced with the complexity of making individual Status Determination Statements (SDS), and the legal exposure of getting them wrong, many simply decided not to engage PSC workers at all. If you wanted to work for them, you came through an umbrella company or on PAYE.

We understand why. Umbrella removes the SDS burden from the engager entirely. If the umbrella is operating correctly, the worker is an employee of the umbrella and the off-payroll rules do not apply in the same way. Administratively clean. Legally simple. And that simplicity was appealing to HR and finance teams who had been given little time and even less guidance.

The problem is that this approach treats all freelancers the same regardless of their actual working arrangements, and that has real consequences. Where some broadcasters did increase rates to help workers absorb the umbrella margin and employer’s NIC costs, they found themselves spending more to deliver the same person a lower take-home than they’d previously earned. A meaningful number didn’t adjust rates at all, leaving the worker to absorb the full hit.

The deeper injustice is that the worker ends up worse off in every direction. They pay more tax than a directly employed PAYE worker sitting next to them doing the same job. They carry none of the employment rights that person enjoys: no sick pay, no holiday pay, no unfair dismissal protection, no redundancy rights. And yet those employment rights were precisely what distinguished the PAYE role from the freelance one. Contracting was always a trade-off: less security and less consistent work in exchange for higher pay and greater autonomy. The blanket inside ruling stripped away the upside while leaving all the downside firmly in place. Many felt, not unreasonably, that they had been handed the worst of both worlds. Skilled, experienced freelancers have choices. Some voted with their feet.

The umbrella landscape is also changing. The Employment Rights Act 2025 introduces tighter regulation of umbrella companies and joint and several liability provisions for supply chains from April 2026. A compliance strategy built entirely on umbrella engagement needs to be stress-tested against what is coming. An FMS that maintains a clean, structured record of your supply chain and engagement terms is increasingly important due diligence in this environment.

POSITIVES

• Eliminates the SDS process and associated liability for the engager
• Simple and administratively clean to implement and manage
• Creates a consistent, uniform workforce engagement model
• Reduces risk of HMRC challenge on individual status determinations

RISKS & CHALLENGES

• Often implemented without rate adjustments, meaning workers take a pay cut despite the engager paying more
• Strips the financial upside of contracting while providing none of the employment rights of PAYE
• Alienates experienced freelancers who are genuinely self-employed and know it
• Does not reflect the actual employment status reality of the workforce
• Umbrella regulation is tightening significantly from April 2026, bringing new supply chain obligations

2. The Appendix 1 Route: Using HMRC’s Behind-Camera Guidance

This is the approach we consider the most technically sound, and yet it remains underused. Partly because it requires a working understanding of what HMRC’s guidance actually says, and partly because it demands a degree of operational diligence that some companies have been reluctant to commit to.

HMRC’s Employment Status Manual includes a section (ESM4118) that references what was originally known as the “Appendix 1” list: a catalogue of behind-camera roles in film, TV and radio that HMRC accepts are normally self-employed, provided certain conditions are met. The list was updated and refreshed in December 2019 and covers a wide range of roles: camera operators, lighting technicians, grips, sound recordists, production designers, directors of photography, and many more.

The rationale is straightforward. These are workers who typically juggle multiple clients, have no guaranteed hours, use their own equipment, carry their own professional risk and operate in a genuinely project-based way. The hallmarks of self-employment are present. HMRC recognised this, and the Appendix 1 list formalises that recognition.

Critically, the list is not a blanket exemption. If the individual meets the criteria and the role is on the list, they can be treated as self-employed without a full SDS assessment. But the working arrangements still need to support that position. An editor who has been working exclusively for one broadcaster five days a week for three years is not going to survive HMRC scrutiny regardless of which list they appear on.

This is where documentation matters enormously. The Appendix 1 route is defensible, but only where the working arrangements genuinely support self-employment. Booking history, rate structure, concurrent engagements, equipment ownership, the absence of day-to-day direction: these are the things HMRC will look at. An FMS that maintains a contemporaneous record of all of this, per worker, per engagement, is the difference between a defensible position and one that falls apart under scrutiny.

The Lorimer letter. It is worth understanding where the Appendix 1 list actually comes from. The list has its origins in a long-standing agreement between HMRC and the production industry. That agreement recognised that many behind-camera roles in TV and film had the genuine characteristics of self-employment and that applying a full status assessment to each engagement would be impractical given the way production workforces operate. The Appendix 1 list is the formal, updated expression of that agreement. Understanding its provenance matters because it is not a concession extracted reluctantly from HMRC; it reflects HMRC’s own recognition of how the industry genuinely works. That gives the list real weight when properly applied.

Individual freelancers can also apply directly to HMRC for their own Lorimer letter (also known as an LP10 letter), which provides written confirmation to engagers that the individual should be paid gross as a self-employed contractor. There is no single application page on GOV.UK; the process runs through HMRC’s Film Production Unit directly. Workers contact the unit to request a questionnaire and engagement history spreadsheet, complete them and return. HMRC’s threshold is meaningful: applicants need to demonstrate contracts of 10 days or less across at least 10 different engagers in the previous 12 months, alongside evidence of financial risk or substantial equipment provision. Letters are valid for one year and need to be renewed annually, though repeat applications are generally less onerous than the first. The threshold itself is a useful signal: these letters are genuinely for jobbing freelancers working across multiple clients, not for people in long-running arrangements that happen to be structured as self-employment.

To apply, contact HMRC’s Film Production Unit: a.filmproductionunitmailbox@hmrc.gov.uk or call 0300 123 2326. For a fuller explanation of how the letter works in practice, Frame 25 has a detailed guide at frame-25.com/news/hr/lorimer-letters-what-broadcast-media-professionals-need-to-know

The full guidance is available at: gov.uk/hmrc-internal-manuals/employment-status-manual/esm4118

POSITIVES

• HMRC-backed, providing a clear and defensible basis for outside determinations
• Allows genuinely self-employed freelancers to maintain their PSC arrangements
• Preserves workforce quality by retaining experienced talent on their preferred terms
• Better reflects the actual employment reality of behind-camera production roles

RISKS & CHALLENGES

• Requires genuine understanding of which roles qualify and under what conditions
• Working arrangements must actually support self-employment; the list is not a blank cheque
• Needs documentation and audit trail to be defensible on investigation
• Does not apply to roles not on the list, which still require a full SDS

3. The Day Limit: Capping Engagements to Evidence Freelance Status

One of the more creative responses to the off-payroll rules has been the introduction of booking limits: capping the number of days or shifts a freelancer can work for a single engager within a tax year. The logic is that a worker clocking 250 days a year in the same role, at the same company, starts to look an awful lot like a disguised employee. Limiting engagement below a meaningful threshold helps maintain the genuine freelance nature of the relationship.

A number of well-known broadcasters and rights holders have adopted this model, with caps typically set in the range of 100 shifts per tax year. It is a sensible principle and, when properly implemented, does demonstrate something meaningful: that the worker genuinely has multiple clients and is not dependent on a single engager.

The challenge is that the cap does not, by itself, determine status. It is one factor among many. A worker who does 90 days exclusively for one broadcaster and has no other clients is probably not genuinely self-employed regardless of the cap. Conversely, a camera operator who does 50 days for a broadcaster and 100 days across other clients is likely to be comfortably outside IR35 with or without an explicit limit.

The cap also has practical implications for workflow. Losing an experienced technician mid-project because they have hit their limit creates operational disruption. And there is a real risk that the limit becomes a compliance box-tick rather than a genuine reflection of working practices, which is precisely the kind of thing that looks bad under investigation.

For this approach to carry evidential weight, it needs to be enforced consistently and tracked accurately. Hive 25 has a built-in shift counter function that monitors days worked per freelancer, per client, per tax year and flags approaching limits before they become a problem. More importantly, it creates an automatic record that the policy is being followed in practice, not just stated in a contract.

POSITIVES

• Visible, auditable mechanism that demonstrates freelance working patterns
• Prevents unintentional drift into disguised employment territory
• Clear and easy to communicate to workers and operational teams
• Supports the position that workers are genuinely engaged across multiple clients

RISKS & CHALLENGES

• The cap alone does not determine employment status; it is one indicator, not a defence
• Operational disruption when experienced workers hit their limit mid-project
• Requires consistent enforcement and accurate tracking to carry evidential weight
• Risk of becoming a box-tick rather than reflecting genuine working practices

4. The Managed Service Provider: Delegating Status and Supply

Another widely used model is the Managed Service Provider, where the resourcing function is outsourced entirely to a third party who takes on responsibility for the supply chain, including employment status determinations. In this model, the engager is not directly engaged with the PSC at all. The MSP sits between them, often with its own contractual structure that allows for substitution and other indicators of genuine self-employment.

Substitution is worth dwelling on. The right of substitution (the ability to send a competent replacement rather than showing up personally) is one of the clearest markers of genuine self-employment. Most broadcasters and production companies would struggle to say this is something they actively accommodate. In the MSP model, it can be built into the contractual structure, making the arrangement more defensible from the outset.

But it is worth being clear on what defensible actually requires. A contractual right of substitution that is never exercised carries some weight, but it is always vulnerable to the argument that it was never intended to be used. Where substitution has genuinely occurred, and where that is evidenced through separate invoicing from the substitute cross-billed to the MSP rather than the original worker, the position becomes substantially stronger. HMRC finds it much harder to argue that a right is contractual fiction when there is a paper trail showing it was actually used.

Done properly, the MSP model can be highly effective. The risk is that many MSP arrangements are MSP in name only. The engager still dictates working arrangements, still directs the individuals on a day-to-day basis, and the MSP relationship is essentially an administrative layer rather than a genuine transfer of control. HMRC has repeatedly shown it will look through contractual structure to actual working practice.

The other significant differentiator in a properly structured MSP is insurance. Our managed service operates with an IR35 Protect insurance policy through Kingsbridge, meaning the compliance position is not just contractually assumed but genuinely insurance-backed. If a determination is ever challenged, there is real cover behind it, not just a well-worded clause. That combination of platform-level evidence and insurance-backed assurance is what separates a properly structured MSP from one that exists only on paper.

Hive 25 supports this model natively. Our platform gives the end client real-time visibility of who is working, in what role and when, without compromising the MSP’s contractual position. Substitution workflows are tracked and documented, including the separate invoicing trail that gives the right genuine evidential weight rather than leaving it as a clause that was never tested.

POSITIVES

• Genuine transfer of employment status risk to the MSP when properly structured
• Substitution can be built into contractual terms as a real, exercisable right
• Insurance-backed compliance position provides assurance beyond contractual language
• Expertise in workforce compliance sits with the MSP rather than the engager
• Scalable and well-suited to large roster operations with high booking volumes

RISKS & CHALLENGES

• Only effective if the MSP genuinely controls the working arrangements in practice
• HMRC looks through structure to substance; a paper MSP arrangement offers little protection
• Requires robust contractual protections and clear delineation of control
• Can reduce operational visibility for the end client without the right platform in place

5. Statements of Work: Knowing When It Works and When It Doesn’t

SOW arrangements have perhaps attracted more suspicion than they deserve, but also, in some corners of the industry, more uncritical adoption than is wise. The reality is more nuanced than either position suggests.

The principle is sound. If you engage an individual or their company to deliver a defined outcome rather than provide a service under direction and control, the off-payroll rules do not apply. It is a project, not an engagement. The worker is completing a deliverable, not filling a role. In the right circumstances, this is a legitimate and entirely defensible model.

Where SOW works well: bespoke post-production work with a clearly defined deliverable, a specific technical output with genuine autonomy over how it is achieved, or a creative commission where the brief is set and the execution is left to the contractor. In these scenarios the working arrangements genuinely support the contractual structure, and the SOW reflects reality rather than obscuring it.

Where SOW becomes a risk: broadcast operations, live production, or any role where the individual is integrated into a team, working to a schedule set by the engager, using the engager’s equipment and following day-to-day editorial direction. In these environments, the SOW label does not reflect the working reality. HMRC’s test is always the substance of the arrangement, not what the contract says. If your booking records tell a different story to your SOW, the SOW will not protect you.

Several broadcasters adopted SOW arrangements post-2021 as a way of preserving PSC engagement while sidestepping the rules. HMRC has been watching, and enforcement activity in this area has been increasing. The label on the contract does not determine the nature of the engagement. Used thoughtfully and in the right context, SOW is a legitimate tool. Used as a blanket workaround, it carries significant exposure.

POSITIVES

• When genuinely applicable, removes the engagement from the off-payroll rules entirely
• Appropriate for clearly defined, project-based outputs where the contractor has real autonomy
• Allows PSC engagement to continue where the working arrangements honestly support it
• Can work well in post-production, technical delivery and creative commission contexts

RISKS & CHALLENGES

• High risk if the working arrangements do not match the contractual structure
• HMRC is actively scrutinising SOW arrangements; enforcement is increasing
• Does not work in integrated team, live production or editorially directed environments
• Booking records that contradict the SOW are potentially more damaging than no SOW at all
• A false economy if used as a workaround; the compliance risk often outweighs the benefit