HMRC’s Check Employment Status for Tax (CEST) tool has had no formal testing, according to a response to a Freedom of Information request by website ContractorCalculator.
With the rules already being in place for the public sector, and to be rolled out to large and medium employers in the private sector, this is concerning.
Whenever HMRC undertake an employment status review they always ask if an engager has completed the CEST. Where businesses are engaging for individuals to provide a personal service and are paying for these services outside of the payroll, then we always recommend that they complete HMRC’s CEST.
If the CEST is negative, they should hold this on their records. If positive, the engager should consider whether the scope of work etc. can be altered so that the engagement does not suggest employment for tax purposes.
ContractorCalculator undertook an 18 month investigation into the tool, uncovering various shortcomings and inconsistencies. Some of the failures include that CEST is inaccurate, unreliable, biased, is not in alignment with the law, it only asks a fraction of key questions, and more. You can read more about this here: https://www.contractorcalculator.co.uk/cest_failings_contractorcalculator_investigation.aspx
If you have any queries regarding this topic, please contact us on 0191 285 0321 or email firstname.lastname@example.org