IR35 and off-payroll legislation is difficult to get to grips with. There is confusing advice, and even HMRC’s own online tool, Check Employment Status for Tax (CEST) has been criticised by sector experts. So how on earth can you be expected to navigate this space?
Help is at hand through a brand-new free CEST determination checker, developed by IR35 Shield, to inform users of any areas of weakness with their CEST assessment.
HMRC’s CEST tool was originally released in 2017 to help firms determine the status of their workers when the off-payroll legislation was enacted. However, since its introduction, CEST has become misaligned with the law, putting businesses at risk.
Key concerns with CEST include:
- Despite HMRC promising Parliament to keep CEST updated, the underlying rules engine has not been updated since 24 October 2019 – since then, eighteen IR35 tribunal decisions have been published.
- The IR35 tribunal decision of HMRC v Atholl House made by the Court of Appeal on 26th April 2022 proved that many of HMRC’s longstanding case law status arguments, upon which CEST was built, were wrong.
- CEST’s single-factor approach to “Outside IR35” determinations can breach the statutory need to take reasonable care.
Dave Chaplin, CEO of IR35 Shield, said: “CEST is not mandatory nor a panacea on status issues. Its misalignment with the law can inadvertently present firms with tax risk.
“To help firms and contractors navigate status determinations better and know where they stand, we have designed a free CEST checker that will help users understand how CEST reached its decision and any weaknesses in the determination.”
Regular readers of IWORK will know that Dave Chaplin is affectionately known as “Mr IR35” as he has been involved in this legislation since it was brought in over 20 years ago. There is nothing he doesn’t know on the subject!
Check out the CEST checker here.