The recent Business Entity Test regarding IR35 has had many contractors scratching their heads, most wondering why or how they have failed.
When it was first introduced, on initial inspection, it seemed that almost all contractors would be put in the categories of ‘medium’ or ‘high risk’, due to the seemingly harsh scoring methods put forth by HM Revenue and Customs.
This poses the question of WHO can actually pass this IR35 test. Most contractors have only been able to earn a few points for merely having PI insurance for example, which would earn them only 2 points and some have picked up a couple more by passing the right of substitution test. Now out of a possible 12 questions, a mere 2 correct answers seems a strangely low score in such a harshly graded test.
This is a factor that the HMRC must rectify to provide real information for contractors regarding their IR35 status, as the test has been deemed pointless by a number of contractors and freelancers according to blogs and forums on the internet. Surely if the consensus is that it must be changed, then it will be changed.
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