Categorized | matt's blog

Father Christmas is inside IR35, according to the HMRC test.

Having spent most of the last 12 years dealing with IR35 on a daily/hourly basis, I felt it would be a good time to adopt a new test for IR35. The problem with a test devised by HMRC – is the people it affects don’t trust its neutrality. Take for example the 70mph speed limit on the M1, I know it wasn’t specifically designed to make my like more difficult. It isn’t complicated, the limit is 70mph and don’t go over it. We all have to stick to that level and so we are all clear on the rules.

Now have a look at the IR35 test, which they have already agreed is flawed. The test devised by HMRC follows the following basic areas – premises, insurance, advertising, business plan, substitution and risk. Looking at the test, you can only reach one conclusion and that is – Father Christmas is a disguised employee of my children.

  1. Father Christmas does not own premises that are separate from his home or clients.
  2. I do not require Father Christmas to have professional indemnity insurance before he climbs down the chimney.
  3. Father Christmas is not able to finish his contract early and therefore is not able to profit from working more efficiently. I pretty much insist he delivers on Christmas Eve (therefore I also control how he works).
  4. He would not pass the assistance test as he works for free.
  5. Does Father Christmas advertise?
  6. I have searched on the internet and cannot find a business plan with a cash flow forecast for any elves/pixies. This would mean that Santa does not have a business plan and does not get the 1 point.
  7. Does Father Christmas have to correct any errors at his own expense?  If someone can give me an example of getting him out on Boxing Day, I’m all ears. (a bit like the elves).
  8. And here is the most important point; Father Christmas does not have the right of substitution. Only Father Christmas can deliver presents on Christmas Eve. It just wouldn’t work if the tooth fairy showed up on a sleigh pulled by Easter Bunnies.

This all just illustrates how bizarre the test really is. By using some very narrow ideas about what a business actually does, HMRC have come up with yet another waste of paper.

Next week I will be writing an actual test that will show once and for all, exactly who is inside and who is outside of IR35.

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