THE PROBLEMS WITH HMRC’S CEST TOOL

The UK Government’s IR35 tool can’t return a result nearly 20% of the time, according to a leading contractor news source.

Contractor Weekly reports that figures have revealed that HMRC’s IR35 tool – Check Employment Status for Tax (CEST) – was unable to deliver a determination for nearly 1 in 5 users in the past year, amounting to over 188,000 indeterminate answers.

Concern

The website says the data has renewed concerns about the effectiveness and accuracy of CEST, which has been described as “frightening”, with experts saying that it leaves businesses and contractors in “limbo.”

Contractor Weekly adds CEST was used by contractors and businesses 975,416 times between November 2019 and November 2020. Of those, it reports, 52% were deemed to be outside IR35 and 29% were found to be inside IR35.

However, in 19% of cases, CEST was unable to return a result. When this happened, users were told to check the information they had input, refer to the Employment Status Manual and given HMRC’s contact details.

Damning

Contractor Weekly quotes Qdos CEO Seb Maley as saying : “These figures are damning. It’s worrying enough that CEST has been used nearly one million times in the past year, but that it hasn’t been able to make up its mind a staggering 188,000 times is frightening.

“To make matters worse, people are then expected to work it out themselves by checking the complex Employment Status Manual or get in touch with HMRC. It’s alarming that CEST allows so many contractors and businesses to be left in limbo. These are decisions that carry with them tens, sometimes even hundreds of thousands of pounds in tax liability.”

Read on

To read more of the article visit Contractor Weekly.

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