In the past 4 years there has been a lot of confusion regarding the exposure of IR35 for most UK contractors and freelance worker. The guidelines were very fussy and left a lot of contractors and freelancers unsure if they should be operating inside or outside the IR35 environment.
There have been calls from major bodies in the UK to remove IR35 and introduce a much simpler system for self employed taxation.
In May 2012 HMRC has responded with a questionnaire to help contractors determine if they are operating inside or outside the IR35 legislations. The test is made up of 12 questions which ask the contractor a number of questions and take them though different scenarios which are all given a point score. The higher the number of points a contractor score the less of a risk of being exposed to IR35. The same bodies who called for the removal of IR35 are not convinced this test will do enough to clear up the problems .
Provided by IR35 Business Test