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News - 5 November 2014

Business Entity Tests to be withdrawn

HM Revenue & Customs (HMRC) has announced that it will withdraw Business Entity Tests (BETs) from 6 April 2015.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“BETs were introduced in 2012 to enable contractors to assess their risk of being reviewed by HMRC under IR35 rules if they do not meet HMRC's definition of 'self employment'. An IR35 review can result in significantly higher tax bills for a contractor if they are deemed to be employed rather than self-employed.”

However, if HMRC opens an enquiry before 06/04/15, and a business can show to HMRC's satisfaction that they have taken the BETs with an outcome outside IR35 or in the 'low risk' band, then HMRC will close the enquiry. They also won't open another IR35 enquiry for 3 years if the information provided is accurate and circumstances (in particular working arrangements) don't change in that time.

Where HMRC closes an IR35 enquiry based on the BET results, the business should keep those results and any evidence relied on to take the tests for at least the 3 year period involved.

If you need any help and advice with your Tax compliance and planning, or you wish to know more about the ABDS tax Investigation Service, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients and
mindful of their long term strategic goals

Helping Your Business is Our Business

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