01912761311 info@glencrodger.co.uk

CEST tool update comes under fire

27th November 2019

HMRC has released its tweaked check employment status for tax (CEST) tool, with some stakeholders maintaining the claim that it is not fit for purpose.

The tool was first introduced in 2017 as part of the extension to the off-payroll rules that applied to the public sector.

It aimed to help public-sector contractors and organisations determine if a worker should be taxed as an employee.

But widespread criticism following several high-profile cases forced the Revenue to update the tool ahead of a further extension of the rules to the private sector.

The tool asks a series of questions to determine a worker's employment status, before HMRC gives its verdict based on the information provided.

Around 30 questions used by the tool have been updated, but some of the 300 stakeholders involved believe the update has not addressed key issues.

Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed, said:

"We have grave reservations about the CEST tool.

"We've looked at the updated version and spoken to HMRC and we're still not satisfied it is accurate.

"It still does not test the mutuality of obligations, which is a key tenet of recent IR35 cases.

"Unless we can understand that, the tool will never produce accurate results."

Speak to us about any aspect of IR35.

icaew chartered accountants  North East Chamber of Commerce Logo