HMRC's CEST Employment Status Tool Overruled by Tribunal

An employment tribunal Judge has just determined a Consultant as self-employed – in contradiction to the result of HMRC’s online employment status tool.

Tony Elbourn, a Business Analyst who was engaged by the Met Office, was suffering deductions for tax and national insurance on the result generated by HMRC’s so called ‘Check Employment Status for Tax’ (CEST) online service. Disagreeing with the automated decision, Elbourn has successfully managed to prove that he was not employed, or a ‘worker’ but genuinely self-employed and therefore entitled to receive gross payments into his business and account for his own liabilities.

Whilst it has been widely criticised by various industry stakeholders, HMRC have assured businesses and taxpayers that it will ‘stand by’ any decisions generated by the CEST service, so this ruling is not going to be helpful for clients or contractors who want to get employment status, and the relevant tax treatment, right.

This situation is only going to be made less clear, especially in light of the proposed extension of the public sector rules for IR35 – where the client is responsible for making the correct determination – into the private sector, which could happen as soon as April ’19.

Talk to IN-SYNC Group about the flexible workforce, engaging contractors, IR35, employment status and the benefits of outsourcing.

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