IR35 changes

Posted on 07 Feb 2018
Share Blog Post

HMRC have accepted a recommendation to withdraw the Business Entity Tests (BETs) from 6 April 2015 following a review finding that BETs was used very little and not fulfilling their intended purpose. Accompanying example scenarios will also be withdrawn say Harris & Co accountants Northampton, the specialist small business accountants #accountantsnorthampton

BETs, introduced in 2012, are voluntary tests to help taxpayers self-assess the overall risk that the IR35 provisions will apply to their business. They are made up of a series of weighted questions where the totalled score determines whether the business risk in relation to IR35 is low, medium or high.

From 6 April 2015, the BETs will not be taken into account when HMRC opens an IR35 enquiry. Prior to this date, businesses can continue to take the BETs if they wish or are asked to do so as part of a tendering process.

If an enquiry is opened before 6 April 2015, and a business can show to HMRC"s satisfaction that they have taken the BETs with an outcome outside IR35 or in the "low risk" band, HMRC will close the enquiry. HMRC will not open another IR35 enquiry for 3 years if the information provided is accurate and circumstances don"t change in that time.

HMRC say where an IR35 enquiry is closed by them based on the BET results, the business should keep those results and any evidence relied on to take the tests for at least the 3 year period involved.

View more blog posts

HMRC to close phone lines
Posted on 25 Mar 2024
HMRC to close phone lines
read more
More people in higher rate tax
Posted on 18 Mar 2024
More people in higher rate tax
read more
Tax cuts illusory
Posted on 13 Mar 2024
Tax cuts illusory
read more
MTD extended
Posted on 01 Mar 2024
MTD extended
read more
Back To Top
01604 660661