Improvements needed to CEST, says CIOT

HMRC’s check employment status for tax (CEST) tool must be improved if the rollout of the off-payroll working rules to the private sector is to work properly. Further it should be ready by October 2019 at the latest so that new and existing contracts can be reviewed by April 2020. This is a recommendation in the Chartered Institute of Taxation’s response to HMRC’s consultation on the off-payroll working rules.

The criticism comes in the light of First-tier Tribunal decisions on off-payroll working rules that have gone against HMRC and HMRC’s acceptance that the tool provides a determination in only 85% of cases.

Colin Ben-Nathan chair of CIOT’s employment taxes sub-committee said: ‘Until CEST takes proper account of mutuality of obligation multiple engagements contractual benefits – such as holiday pay maternity and paternity pay – and whether someone is in business on their own account ...