Contractor Weekly understands that the much anticipated 'business entity' test, together with other initiatives to improve the administration of IR35 will not be officially disclosed until either Bank Holiday Monday or that same week.
The 'business entity' test, along with the six IR35 scenarios plus guidance is expected to appear on HMRC's website on 7th May, having originally been planned for April.
The test has already been leaked on industry websites much to the chagrin of both HMRC and the PCG. Kate Cottrell, IR35 specialist and member of the IR35 Forum, was quoted on Contractor UK as saying, “industry websites hosting parts or all of the test, which may not be the final test that HMRC publishes, aren't helpful and are causing concern for individuals.”
HMRC has confirmed that it is necessary to view the test in conjunction with its official guidance, so it can be put into context.
Despite all the recent speculation it must be remembered that the IR35 business tests form part of a pilot and is designed to aid freelancers gauge their risk exposure. IR35 itself has not changed.
Interested parties in the industry will attend a meeting next Tuesday, hosted by HMRC, to discuss the new operational approach. All being well, therefore, there should be a plethora of IR35 news to report.
If the sample questons and weightings I have seen on industry websites prove to be correct, then virtually ALL PSCs will be at high risk.
Easier for the government to change the tax rules and state that all PSCs are deemed to be PAYE than this cloak and dagger approach.
@Graham Boyd
It’s probably worth pointing out that Personal Service Companies (PSC) only exist in the blinkered minds of the Revenue’s strategists. Here in the real World we have self employed, limited companies, public limited companies and the various forms of partnership agreements.
PSC’s do not exist in law and cannot be taxed any differently from those entities that do.