In HMRC’s efforts to help contractors understand the legislation and give some guidelines to self-assess their status, the Business Entity Test was born.
The test is a series of questions, with each answer worth a number which are then tallied up to a total which is worth a level of risk of investigation (low, medium or high). It has proven relatively controversial and many industry professionals desist its use as it is actually quite difficult to get a low score, even for an apparently obvious genuine contractor, nor does it assess your status thoroughly enough to be solely relied upon.
Most will use the test in the hope of a low score, as if you are so lucky, in the event of an enquiry from HMRC, you are able to provide them with your results (and sufficient evidence) and you will not be enquired again for a further 3 years. It is important to remember, however, that having a low score on this test does not mean you are necessarily outside of the legislation, just that you are at a lower risk.
The majority of contractors, genuine or otherwise, will fall into the medium to high risk category. It is important, therefore, to ensure that you have had a professional review of your status completed (contract and working practices). By not taking reasonable steps to ascertain your status, you run the risk not only of getting caught, but of larger penalties if you are caught.
You can take the test online here. We also have videos and a downloadable guide to keep you on track with the legislation and as part of our service, offer an annual review service in partnership with Qdos Consulting.
Self Assessment – Q & A
Self-assessments. We have all heard of them, you maybe even know what they are. However, here at QAccounting some of our most frequently asked questions are about self-assessments. So below we have outline some of the most common questions we get asked, and the answers we get so tired of giving… just kidding.
Setting Up a Limited Company – 5 Key Things to Consider
If you are looking at going self-employed, then setting up as a Limited Company (LTD) may be the best option for you.
The Benefits of Having an Online Accountant
Here at QAccounting we are part of one of the UK’s largest contractor service providers. We started operating over a decade ago (around the same time DFS started their first sale) and have been dedicated to serving self-employed professionals ever since. One of the perks of choosing and accountant like QAccounting is that we offer all of our accounting services online.