The simple answer is 'No,' IR35 has not changed however HMRC have recently introduced their so called "Business Entity Tests." These Business Entity Tests are likely to be used by HMRC to target businesses that they wish to review from an IR35 perspective. Prior to opening an IR35 enquiry into a business, you may now be given the opportunity to complete the Business Entity Tests. If you receive a high or medium risk rating HMRC may pursue their IR35 enquiry, asking for details on your assignment contracts and working practices. On the flip side, if you score a low rating, HMRC are unlikely to pursue their enquiry and will not approach you again for at least three years. Those who fall into the low risk category are likely to feel a sense of certainty on their IR35 status which they have never had before, however some commentators believe that a high proportion of small business are likely to fall in the high or medium risk category and that the pointing system does not reflect the reality of how businesses operate.What do you score? Download the test now!The questions that make up the test are:
Test score and risk banding:
Total score Risk band
Less than 10: High risk
10 to 20: Medium riskMore than 20: Low risk Next stepsA key point to remember is that a medium or high risk score does not put you automatically inside IR35. However it does mean that HMRC are more likely to open an IR35 enquiry against you than if you scored in the low risk category.Despite being low in recent years, we may see HMRC open more IR35 enquiries following the introduction of these Tests and with this in mind we do recommend that you get IR35 advice on your assignments if you have not done so already. On request, you can use PayStream's internal compliance team who will review your circumstances from an IR35 perspective. If you have any questions or queries on these Tests, or want an IR35 review, please contact the Compliance Team on 0161 929 6000 or email firstname.lastname@example.org.