• About
  • Solutions
    • Mango Umbrella
    • Mango PAYE
    • Mango Self Employed
  • Contractors
  • Agencies
  • Accountancy
  • News
  • Contact
  • Covid-19
  • Login
Latest iteration of HMRC’s CEST tool issued
Mango Pay - Blog Image - HMRC CEST
Uncategorised

Latest iteration of HMRC’s CEST tool issued

9th December 2019

HMRC have revamped their ‘Check Employment Status of Tax’ (CEST) tool, in readiness for the off-payroll working rule changes taking place early next year. 

From April 2020, the off-payroll rules are extending to medium and large-sized private end-users, making them responsible for determining the IR35 status of their workers. If a worker is, in practice, an employee, they will fall within the IR35 regulations, making the end-user responsible for deducting tax under PAYE and paying NICs and, if applicable, the apprenticeship levy. Failure to correctly classify the employment relationship and apply IR35 can result in back payments and fines. 

However, there is no precise legal test for determining whether an individual is an employee for the purposes of IR35. While years of case law have established a number of factors to be taken into account, making the determination can be challenging. 

To help, HMRC released CEST in 2017. CEST is an online questionnaire that provides HMRC’s view on an individual’s employment status for tax and NICs purposes, based on the information provided. As long as this information is correct, HMRC will stand by the determination of CEST. However, the tool has been plagued by bad reviews, with HMRC themselves admitting the limitations of the tool and its inability to provide answers in 15% of cases. 

Accordingly, the tool was reviewed as part of HMRC’s preparation for April’s changes. As part of this review, HMRC worked with more than 300 stakeholders and tested rigorously against case law and settled cases by official and external experts.  

The new version is officially live here, with noticeable updates including:

  • A complete redesign;
  • Clearer questions;
  • New questions on substitution, business on own account and the provision of equipment; and
  • The ability to use the tool for indicative purposes before full details are known. 

In addition, HMRC has published new guidance in its Employment Status Manual, to assist users in making their determination. 

While the new updates will certainly make it easier for end-users, agencies and workers to determine their employment status, this is still a complicated area of law. Furthermore, the new tool still fails to take into account mutuality of obligation –  something that has been a deciding factor in a number of recent IR35 cases. 

We will have to wait and see how well the latest version of CEST performs under the new off-payroll working rules in April 2020. In the meantime, if you’d like to know more about how you can prepare for IR35 and assess your current working arrangements, get in touch today. 

Professional Passport Accountancy Logo
Professional Passport Umbrella Logo
Professional Passport CIS Gross Status Logo
Professional Passport Joint Employment Logo
Bauer & Cottrell Logo
Free Agent Gold Partner Logo
APSCo Affiliate Logo
FCSA Accredited Member Logo
Prism Accredited Members Logo
Prism Logo
Cyber Essentials Logo
Team Service Provider Logo

Contact Us

For more information or to book a meeting to discuss further, please contact us on the details below:

  03300 580 190
  sales@mangopay.co.uk
  Contact form

Resources

  • Expenses Claim Form
  • Holiday Pay Request Form
  • Submit your Right to Work documents
  • Timesheet
  • Careers
  • Gender Pay Gap
  • Certificate of Employers Liability
  • Modern Slavery and Human Trafficking Statement
  • Privacy Policy

Links

  • LinkedIn

More Links

Copyright © 2021 · Mango Pay

Privacy & Cookies Policy

Christmas
Office Opening Hours

December

Monday 18th – Friday 22nd:  Normal office hours & payroll deadlines

Monday 25th:  CLOSED

Tuesday 26th:  CLOSED

Wednesday 27th:  9:30am – 16:30pm

  • Payroll deadline 1pm
  • Expenses deadline midday

Thursday 28th:  9:30am – 16:30pm

January

Monday 1st:  CLOSED

Tuesday 2nd:  Normal office hours

We all wish you a very happy Christmas and a prosperous 2018!

Mangopay uses cookies to collect information about how people use our website, which we use to improve the site’s functionality and our services. Please click 'I accept' to consent to the use of this technology by Mangopay. You can find out more about our use of cookies in our privacy policy.I AcceptRejectPrivacy Policy
You can revoke your consent any time using the Revoke consent button.Privacy & Cookies Policy