What is it?
The BETs have been around for a couple of years now and have largely seen the response from contractors and professionals alike, that they are not too helpful. In a bid to simplify the complicated and often cloudy IR35 legislation, the Revenue introduced the test compromising of 12 points.
The 12 Points:
- Business Premises
- Professional Indemnity Insurance
- Previous PAYE
- Business Plan
- Repair at own expense
- Client Risk
- Right of Substitution
- Actual Substitution
It was intended to help contractors self-assess their IR35 risk. The problem is, contractors wanted a way to self-assess their IR35 status and so the BETs became an almost pointless exercise with many professionals taking the view that the BETs do not take into account individual’s situations, the weighting of the scoring system does not balance relative to the importance of the tests nor does it assess the written contract or some of the main tests determined by historic case law which are used to assess one’s status. This leads the majority of genuine contractors in the medium to high risk category.
As a result, many contractors are left taking the test, and not knowing what to do with the result. The only saving grace is that should you fall in the low risk category, you will be spared an investigation for at least 3 years, but only if you can satisfactorily prove it.
Chancellor announces that IR35 reform will be scrapped
IR35 reform in both the private and public sectors is to be repealed, the Chancellor announced in the mini Budget, held on Friday 23rd September.
This surprise development made up just one of many welcome tax changes, as Liz Truss’s new-look government promised to start “a new era” and unleash the potential of UK business.
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It’s an often-quoted statistic that around 60% of businesses fail in their first three years – with 20% folding within just twelve months.
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