New IR35 Guidance hot off the presses

[tractor]

...

Its like inventing new games with your mates, if you score you get 1 goal and if I score I get 2....... Its like being a kid again, only difference is that not even I could get the scoring so unfair..... Come on, 35 points for your goals and 2 for mine.....

Reminds me of Joey, Chandler and Ross playing 'cups' in Friends. Look it up if you haven't seen it.

But this is what you get when successive spineless governments don't stand up to the civil servants, the tail is still firmly wagging the dog, SNAFU

[d000hg]

I'm still trying to get my head around why in the scenarios HMRC rely on Control and yet it doesn't score anywhere in the test??? Am I missing something?

Also what happened to Mutuality of obligation??

I'm with Mal on this one, ignore the test.

I suppose we are supposed to view it as how likely HMRC are to consider as worth investigating, not how likely we are to actually be caught.

Well, running a pure B2B home office business with fixed price, this test states that I'm medium risk.

Pure unadulterated nonsense. Plus ça change, plus c'est la même chose.

And I notice there's no ZERO risk score either.

Waste of time and another bout of HMRC scaremongering and predictable incompetence.

I shall ignore it once again.

I'm with you.

Also, where does it state which types of business this applies to? What about a painter & decorator, or a wedding planner?

[malvolio]

This bit

The IR35 Forum has helped us to draw up a set of ‘business entity’ tests

merits a mention.

The various groups in the Forum spent several thousand pounds on experts from some major tax consultancies and many hours of their own time and resources to design a usable and relevant set of tests that were presented to HMRC. They were specifically designed to assess IR35 liability for a range of small and nano-businesses and distinguish them from F2Ms and other we're-not-really-avoiding-the-tax merchants and those forced into incorporation. Which is what everyone thought was the general idea.

HMRC rejected those tests - to be precise, they never referred to them again - and produced their own, which bear lilttle or no resemblence to them. They also rejected a revised scoring regime that would have made their tests just a little more relevant.

Make no mistake - this farrago is HMRC's own work, nobody else's.

[meanttobeworking]

I just took the test on my wife's behalf - she runs a mobile nail technician business (manicures and the like). She would score between 4 and 7, depending on how you interpret the questions.

What kind of an 'in business' test can generate results like that?

[ecc83]

Also, where does it state which types of business this applies to? What about a painter & decorator, or a wedding planner?

All this is squarely aimed at the sector where all the profitable shades of grey regarding IR35 are, ie. IT contractors. If there are thousands of painters and decorators out there working in an office and being told what to do then maybe HMRC should go after them instead. Having said that again show me a painter and decorator who works for £700 a day!

[tractor]

All this is squarely aimed at the sector where all the profitable shades of grey regarding IR35 are, ie. IT contractors. If there are thousands of painters and decorators out there working in an office and being told what to do then maybe HMRC should go after them instead. Having said that again show me a painter and decorator who works for £700 a day!

Well IIRC, the Judicial Review failed on the claim that IR35 was targetted at a specific sector, namely IT but not all sectors and that it was discriminatory. ISTM that IR35 might not pass that test now.

[Kate Cottrell]

This bit

merits a mention.

The various groups in the Forum spent several thousand pounds on experts from some major tax consultancies and many hours of their own time and resources to design a usable and relevant set of tests that were presented to HMRC. They were specifically designed to assess IR35 liability for a range of small and nano-businesses and distinguish them from F2Ms and other we're-not-really-avoiding-the-tax merchants and those forced into incorporation. Which is what everyone thought was the general idea.

HMRC rejected those tests - to be precise, they never referred to them again - and produced their own, which bear lilttle or no resemblence to them. They also rejected a revised scoring regime that would have made their tests just a little more relevant.

Make no mistake - this farrago is HMRC's own work, nobody else's.

Hello Mal

I think the whole test thing was the PCG tests which were presented to the OTS, following PCG's decision to go for tests rather than to get rid off IR35. They were rejected by the OTS and the Chancellor, revamped and put again to the IR35 Forum. If the revamped tests had been accepted in their entirety with the PCG's suggested scoring so that almost all contractors had come out as low risk what difference would this make?

The IR35 legislation has not changed and everyone still has to consider each and every contract. Even if low risk with the evidence to prove it the test will only be worth anything if you are actually investigated under IR35. Consequently we are going to have lots more investigations to test the tests! Some would argue that this makes the whole situation worse.

[NotAllThere]

...
Seriously? people not paying me is a sign I'm in business? What's HMRC trying to say?
...

If you had to chase debts, that's evidence that your business has real financial risk. Not having to chase debts doesn't mean that risk isn't there.

This seems to be (if HMRC were logical, which there not) an own goal. Notwithstanding that actualisation of the risk is what gives you 10 points in their silly little test, HMRC are admitting the existence of the risk, and by ascribing it ten points if it happens are saying that it is a major factor.

This guidance is yet more fodder to fight off an investigation, since we all suffer this risk.

[tractor]

Hello Mal

I think the whole test thing was the PCG tests which were presented to the OTS, following PCG's decision to go for tests rather than to get rid off IR35. They were rejected by the OTS and the Chancellor, revamped and put again to the IR35 Forum. If the revamped tests had been accepted in their entirety with the PCG's suggested scoring so that almost all contractors had come out as low risk what difference would this make?

The IR35 legislation has not changed and everyone still has to consider each and every contract. Even if low risk with the evidence to prove it the test will only be worth anything if you are actually investigated under IR35. Consequently we are going to have lots more investigations to test the tests! Some would argue that this makes the whole situation worse.

Precisely! If the legislation had not been such a crock to start with, none of this would be needed. Arguably, it's not needed anyway.

Problem is, if they had legislated properly, no limited company or llc would have ever fallen foul and they would have wasted their time. As it is, they are quite happy to waste ours.

[v8gaz]

Hello Mal

I think the whole test thing was the PCG tests which were presented to the OTS, following PCG's decision to go for tests rather than to get rid off IR35. They were rejected by the OTS and the Chancellor, revamped and put again to the IR35 Forum. If the revamped tests had been accepted in their entirety with the PCG's suggested scoring so that almost all contractors had come out as low risk what difference would this make?

Citation Needed

The IR35 legislation has not changed and everyone still has to consider each and every contract. Even if low risk with the evidence to prove it the test will only be worth anything if you are actually investigated under IR35. Consequently we are going to have lots more investigations to test the tests! Some would argue that this makes the whole situation worse.

Unless of course you're in the review business