Orange & Gold Blog

IR35 business entity tests flawed

The business entity tests introduced in 2012 are so flawed that in a recent AbbeyTax survey 81% of contractors were deemed to be high or medium risk. 

 Furthermore, in 2011 three tribunal cases were decided resoundingly in the contractor’s favour and the tribunal judges in each case went out of their way to state that the contractors were in business on their own account.  Yet based on the Business Entity Tests their scores would not have exceeded 10 – which puts them right on the cusp of medium/high risk!