Questions and Answers
IR35 : Business Entity Tests
I am a contractor and have been concern about the IR35 regulations for as long as I can remember. I recently took HMRC’s so-called Business Entity Tests and came out ‘low-risk’. Is this the end of the story?
No, I’m afraid not. If you read the small print of the Business Entity Tests, HMRC state that the result of the tests are not binding.
Firstly, the tests are only designed to gauge the risk that HMRC might check whether IR35 applies to you. The tests look at how your business works overall; they do not check each individual engagement/ contract you have.
Furthermore, clearly the tests cannot cover every scenario and each case would need to be considered on its own facts.
If you are concerned that IR35 may apply to you, please speak with your local TaxAssist Accountant.
Date published 5 Dec 2012
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