HMRC has recently updated its Check Employment Status for Tax (CEST) tool although it seems unwilling to provide a concise list of the changes. Instead, it merely tells us that on 25 November 2019, the CEST tool "has been updated so if you do not know the worker, the tool will not ask questions about their circumstances".

It is possible to work out the changes by reverse engineering or by reading through the CEST guidance which lists updates on each page of the manual.

The CEST has been heavily criticised by IR35 contractors and it may not always provide the same result as a tribunal. It should provide assistance in determining the following potential outcomes:

  • Off-payroll working rules (IR35) do not apply.
  • Off-payroll working rules (IR35) apply.
  • Unable to make a determination (for whether the off-payroll working rules apply).
  • Self-employed for tax purposes for this work.
  • Employed for tax purposes for this work.
  • Unable to make a determination (for employed or self-employed for tax purposes).

Where CEST is not able to make a determination, further guidance and information will be provided.

Useful guides around this topic

Contractors & PSC Planning: what now?
UPDATE: we have updated our section on working via an 'umbrella' and added some further tips on what you can do with your company if it ceases trading. 

Personal service companies (PSC) & tax
What is a PSC? Why does it matter for tax? 

Employment Status Tests
A run down of the different tests latest developments in case law.

External links

HMRC CEST Tool

 

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