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Is your business at risk? The test: Part 2

Part 2

The following tests ask a Yes/No question. If you answer yes, you score points. At the end the total number of your points decides which category you are in.

  • 0 – 10 Points – High Risk
  • 10 – 20 Points – Medium Risk
  • 20+ Points – Low Risk

Your answers must be supported by evidence about your company.

 

5. The Marketing Test (Score – 2 points)

In the last year has your business advertising spend topped £1,200?

NB, entertainment is not classed as advertising in this case.

Evidence

–          Copy of advertisement(s) placed

–          Copy of invoice(s)

 

6. The Previous PAYE Test (Score – minus 15 points)

Has the current client end client engaged you:

–          On PAYE employment terms

–          During the last year ending last 31 March

–          With no large scale alterations to your working arrangements?

The following do not count as major changes

–          Doing the same work

–          Working at an alternative location

–          Working for a sister company (e.g. part of the same group).

Evidence

–          HMRC can check your employment history on their records

 

7. The Business Plan Test (Score – 1 point if both answeres are yes)

There are two parts –

a)      Do you have a business plan including a cash flow forecast that you regularly update?

b)      Do you have a company bank account aside from your personal account?

Evidence

–          Copy of business plan

–          Copies of updates

–          Company bank account statements

 

8. Correcting mistakes at own expense Test (Score – 4 points)

Does your company have to bear the cost of correcting any mistakes?

Evidence

–          Clause in contract

–          Descriptions of what could go wrong

–          Descriptions of how you would put it right

–          Details of the cost to your business of correcting mistakes

 

Source: http://www.hmrc.gov.uk/ir35/guidance.pdf

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