Removal of Business Entity Tests in Assessing IR35 in Public Sector
Business Entity Tests (BET’s) have previously been used in the Public Sector to assess whether a contractor working in the Public Sector is outside the scope of IR35 and hence can be paid through their own limited company.
Historically a contractor earning £220 per day or more and on a contract exceeding 6 months could prove they were outside the scope of IR35 by showing they scored 20 or more in the BET’s. With the removal of BET’s from April 2015 this is no longer possible and [presumably they will have to demonstrate they are outside the scope of IR35 in other ways (similar to those that didn’t score 20 or more previously i.e. through an HMRC IR35 Contract review).
To reflect this change reference to BET’s has been removed from Procurement Policy Note – Tax Arrangements of Public Appointees:
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