IR35; Would Batman pass or fail the Business Entity Test?

Reporters from FW Accounting managed to catch up with the Dark Knight recently and rather than ask the same old questions about his summer blockbuster, we thought the Caped Crusader might like to check whether he operated in an IR35 compliant manner. His answers to the 12 Business Entity tests are below –

1. Business Premises Test

FWA: Does your business own or rent premises which are separate from your home and the end clients premises?

Batman: Yes – The Batcave.

FWA: Isn’t the Batcave connected to Wayne Manor, your home?

Batman: well…..the exact location of the Batcave is secret ….. but I can assure you it is separate from my home

10 points

2. Professional Indemnity Insurance

FWA: Do you need Professional Indemnity Insurance?

Batman: I have tried but no-one will insure me.

0 points

3. Efficiency Test

FWA: Has your business had the opportunity in the last 24 months to increase your business income by working more efficiently?

Batman: No, I could never take payment from the good citizens of Gotham City.

0 points

4. Assistance Test

FWA: Does your business engage any workers who bring at least 25% of your yearly turnover?

Batman: my butler, Alfred.

35 points

5. Advertising Test

FWA: Has your business spent over £1,200 on advertising in the last 12 months?

Batman: No, but I feel I don’t need to advertise as the Bat Signal can be seen from any point in Gotham City when activated by Commissioner Gordon.

0 points

6. Previous PAYE Test

FWA: Were you previously employed by Gotham City Police Department?

Batman: No, I have never had any paid employment; I suppose you could call me independently wealthy.

If Batman had answered yes here he would have lost 15 points!

7. The Business Plan Test

FWA: Does your Business have a regularly updated business plan, and do you maintain a business bank account separate from your personal account?

Batman: My only plan is to keep the streets of Gotham crime free. I have multiple bank accounts but all are personal.

0 points

8. Repair at Own Expense Test

FWA: Would you have to bear the cost of having to put right any mistakes?

Batman: Well Robin isn’t the best driver and I did have that repair bill when he reversed the Batmobile into City Hall………….

4 points

9. The Client Risk Test

FWA: Has your business been unable to recover payment for work done in the last 24 months?

Batman: I guess the answer is Yes, as I never seek to recover payment.

10 points

10. Billing Test

FWA: Do you invoice for work carried out before being paid and negotiate payment terms?

Batman: Don’t you pay attention, I told you back in question 3 that I could never charge the good citizens of Gotham City for my services!

0 points
FWA: Does your business have the right to send a substitute?

Batman: I believe that when the Bat Signal is activated or the Bat Phone rings, then it is Batman that the people expect to appear so I would have to say no.

0 points

12. The actual Substitution Test

FWA: So have you ever sent a substitute?

Batman: I am always ably assisted by Robin and occasionally by Batgirl.

FWA: But have you sent them in place of you?

Batman: Occasionally they have acted on their own initiative, not always with the best results…

0 points

FWA: Thanks for your time Batman, we’ll leave it there for today, Good Luck with the film!

Despite some rather odd answers to the questions we posed it appears that Batman is at low risk of being IR35 non compliant, scoring a staggering 59 points.

FW Accounting are Specialist Accountants for Contractors and Freelancers. If you have any queries on IR35 please feel free to give us a call, or you might want to watch some of our videos on this topic on YouTube