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HMRC's employment status tool

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HMRC has updated its ‘check employment status for tax’ (CEST) tool and guidance, including the addition of new chapter, ESM11000, to the Employment Status Manual.

The CEST tool was first launched in March 2017, for use by workers, engagers, or agencies to check whether the IR35 legislation applies to a particular engagement in the private or public sector. It has been criticised for producing an answer in only around 85% of cases. This is the first major update to CEST since 2017.

HMRC says it will stand by results produced by CEST, ‘provided the information is accurate and it is used in accordance with our guidance’.

With the new IR35 rules coming up in April 2020, having an effective CEST tool becomes increasingly important. Susan Ball, tax partner at RSM, welcomed the new version of the tool, which ‘allows engagers time to assess and check if indeed it will work effectively for them. If not, or if it’s only part of the process, it will provide time to look at what other methods might be needed to make sure they make correct status assessments ahead of the new rules in April 2020.’

Issue: 1467
Categories: News