Self-Employed Contractors in the Public Sector

We recently reported that there has been a rise in HMRC investigations into self-employed workers and also that HMRC are moving outside the public sector, however, there is still a significantly high amount of investigations opening into contractors working in the public sector.

All self-employed workers are required to provide evidence of their IR35 status within 20 working days of the issue or renewal of their contract. If they cannot do this, the contract could be terminated and their details may potentially be passed to HMRC.

The Qdos Public Sector IR35 Solution is designed to offer a quick and reassuring solution to this.

We will undertake a detailed review of your written contract, your actual working practices and HMRC’s Business Entity Test. Once we are comfortable of your status, we will issue a certificate pack that can be forwarded to the body you work for (or your agency if applicable).

It is worth noting that a lot of agencies/end clients require self-employed workers to provide evidence of IR35 certification before they agree a contract.

Independent contractors working in the public sector are also required to complete HMRC’s Business Entity Test (BET) as part of providing assurance to the end client regarding their tax status.

The business entity test consists of 12 yes or no questions, once the answers have been provided, the score is totalled up and categorised into either Low Risk, Medium Risk and High Risk.

If you fall under the Low Risk category and can provide sufficient evidence to support this, this would put an IR35 enquiry to bed, and provided that the circumstances (working practices) do not change within the three years, HMRC will not enquire again in that period of time.

If you fall under the Medium of High Risk categories, you are under a higher risk of enquiry. However, we are able to assist and advise you in improving your score.

Please click here for further information on the Business Entity Test

By:Jane Hailstone

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