HMRC’s CEST (Check Employment Status Tool) tool has come under fire from all angles. The introduction of IR35 for the public sector has been plagued by confusion and the tool has been widely criticised as not fit for purpose.
The CEST tool was intended to help businesses and individuals to assess the employment status of a specific individual. Introduced shortly before the changes were enforced for the public sector and available online the tool worked using a series of multiple-choice questions. However, there has been widespread concern about the accuracy of the tests and how the results relate to case law. In fact, there have been a number of cases where the Courts have fought against HMRC (some of them high profile such as the one involving television presenter Lorraine Kelly) and this has led to further confusion and frustration for those affected.
IR35 changes are coming into force for the private sector from April 2020 and consequently HMRC are now under pressure to ensure the tool is fit for purpose before the change happens.
The private sector is significantly larger than the public sector and businesses will want adequate time to prepare. They will need to consider and review the status of all the individuals they have contracting for them. The Chartered Institute for Taxation has stated that the private sector will need access to the new tool at least six months before the reforms come into play.
At present we don’t know exactly what changes and improvements will be included or when the new version will be available. HMRC are now under pressure to ensure that it will be available in the Autumn at the latest although many are sceptical and don’t believe this will be the case.
It has previously been made clear by HMRC that blanket assessments are not a satisfactory approach to determining IR35 status. Therefore, it is hoped that the new tool will be introduced well ahead of the change for the private sector and that it will be user friendly, reliable and effective.
If you have questions about IR35, the changes and your status or a particular contract then get in touch. We’ll be happy to discuss your individual circumstances and your current or potential contracts in relation to IR35.