HMRC holds no detailed evidence to prove CEST accuracy claims
HMRC has acknowledged, in response to a series of Freedom of Information (FOI) requests, that it has no detailed evidence to demonstrate that its Check Employment Status for Tax (CEST) tool is accurate.
After the fallout from the BBC pay scandal had already demonstrated the strain that IR35 is having on the public sector, HMRC’s admission will raise further questions concerning future plans for the legislation.
During the latest committee meeting, it was revealed that CEST had failed 97% of BBC broadcasters who had used the CEST tool, prompting Jolyon Maugham QC to dismiss HMRC’s effort at trying to achieve an “impossibly difficult” task.
With more than 40,000 individuals currently using CEST to assess their IR35 status each month – as revealed in response to another FOI request from ContractorCalculator on 1 November 2017 – many will have been forced into false employment, and subject to excessive taxation, as a result.