IR35 Guides - Are you inside or outside IR35?

Over 3,000 PCG members have already taken part in a trial to determine how accurate the proposed HMRC IR35 business entity tests may be in real world scenarios.

According to the last IR35 Forum meeting minutes, HMRC is likely to upload two new IR35 compliance resources over the next few weeks.

Alongside a set of typical IR35 scenarios, a new 'business entity test' is being developed to provide contractors with their predicted risk to being selected for an IR35 investigation.

Despite the Forum minutes indicating that a general consensus had been reached between its members, it would appear that there is growing disagreement between HMRC and business organisations over the questions to be used in the test, and particularly how the answers will be weighted to provide a realistic IR35 risk assessment.

PCG claims that the business entity test can only be successful if most respondents are found to be 'low risk', and has stated that unless HMRC changes its stance on the scoring, then "PCG and other Forum members will not be able to support the Business Tests."

In order to examine how the proposed tests might work in practice, the contractor organisation has invited its members to take part in a fact finding exercise, which has received a significant response so far, with 3,000 members taking part.

Alongside the 12 proposed HMRC questions, the PCG has also included 6 further questions of its own, which it believes will be useful in further discussions around the creating of a workable IR35 business test.

After the test, PCG members will receive a green, amber or red risk assessment rating based on HMRC's proposed risk criteria.

The deadline for PCG Members to take part in the exercise has been extended to 30th April. You can visit the PCG for more details.