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As a contractor, you will have no doubt heard of tax legislation called IR35. It was introduced by HMRC to help prevent situations of 'disguised employment'. In a nutshell, if as a contractor you supply services through your own limited company or partnership but without that company or partnership you would have been an employee you are caught by IR35.
To test for IR35 status, HMRC introduced an online business entity test which by their own admission did not work. The test did not accurately reflect the case law surrounding employment status. So, in April HMRC scrapped this test.
HMRC has since replaced the test with a new test, the 'online employment status indicator'. This new test is more accurate and HMRC says that the results it produces can be relied on as evidence of employment status.
We have checked through the new test and are pleased to report that in our opinion it now appears to ask more relevant questions and can be used as a pretty good test for IR35 status.
If you would like to check your IR35 status using the new HMRC test then you can do so here:
Follow the series of questions and at the end of the test you will be given an immediate indication as to whether IR35 affects you.
If you are a client of CEJ Contractor Accountants and have any questions about IR35 and how it might affect you as a contractor please don't hesitate to get in touch with us.