Efficiency Test (BET)

[turbowoowoo]

The Efficiency test
Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently?

One way of doing this is finishing a fixed-price contract early. Say you agreed with the end client that the work would take three months and the fee would be £10,000. And say you finished in two months and received the full £10,000 at that point. You would have freed up a month to take on new business. So the answer to this question would be Yes.
Score 10 if you answer Yes

MyCo has completed some fixed price work previously this year only small pieces for £200 - £300 a time, but we have completed these early, so would this be ok to answer Yes to this question?

The 10 points will put me in Low risk



10

[TheFaQQer]

Yes

[JoJoGabor]

Can't see why not. I winder how far you can go, ie if I finish all my work in a day and chip off to the pub at 4pm would this also count?

[TheDandy]

The Efficiency test
Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently?

One way of doing this is finishing a fixed-price contract early. Say you agreed with the end client that the work would take three months and the fee would be £10,000. And say you finished in two months and received the full £10,000 at that point. You would have freed up a month to take on new business. So the answer to this question would be Yes.
Score 10 if you answer Yes

MyCo has completed some fixed price work previously this year only small pieces for £200 - £300 a time, but we have completed these early, so would this be ok to answer Yes to this question?

The 10 points will put me in Low risk

10

Technically yes but I rather suspect no. For those kind of rates it sounds like finishing a piece of work before lunchtime rather than the end of the day. Negotiating a contract would probably take longer. You would have to be able to validate any
answers with some proof. Anyway it's just a questionnaire and just completing it and coming in as low risk doesn't put you outside IR35.

[malvolio]

The Efficiency test
Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently?

One way of doing this is finishing a fixed-price contract early. Say you agreed with the end client that the work would take three months and the fee would be £10,000. And say you finished in two months and received the full £10,000 at that point. You would have freed up a month to take on new business. So the answer to this question would be Yes.
Score 10 if you answer Yes

MyCo has completed some fixed price work previously this year only small pieces for £200 - £300 a time, but we have completed these early, so would this be ok to answer Yes to this question?

The 10 points will put me in Low risk



10

Yes.

The BETs are fatally flawed, even for their intended purpose, but they do not put any parameters on the answers. If you get £200 for working 7 hours 59 minutes instead of the contracted/quoted for 8 hours, you have passed.

They are total bollocks. do not treat them with resect and do not give them any particular importance. It's up to HMRC to challenge the answers.

[jamesbrown]

The phrasing is totally ambiguous. I would read the word opportunity to mean the potential to achieve efficiency, which any fixed price contract provides, regardless of the actual outcome.

[turbowoowoo]

Thanks all, I agree with you that I can answer yes and seeing as this document has no legal standing whatsoever when It comes to IR35 I put myself in the Low score.

Box ticking exercise imho

[northernladuk]

BTW it's a Business Entity Test... Not efficiency....

[jamesbrown]

BTW it's a Business Entity Test... Not efficiency....

You might want to read that a little more carefully Hint: it's a component of the BET....

[DaveB]

PCG+ members may also want to remember that membership gives you access to office space in London.

10 points for Does your business own or rent business premises which are separate both from your home and from the end client’s premises?