[UK] CEST Available soon

With the advent of off-payroll working in the private sector set to become a reality in April 2020, many employers will rely HMRC’s Check Employment Status for Tax (CEST) digital service.  This has been widely criticised for being inadequate and giving out questionable status determinations.  As a result, members have indicated to the Global Payroll Association that they have invested in third party providers at a cost. 

So it was interesting for us to read the parliamentary written question from Jonathan Edwards MP to the Chancellor of the Exchequer on the 2^nd of October 2019:

“To ask the Chancellor of the Exchequer, what progress HMRC has made on establishing a status disagreement process to ensure that contractors can raise concerns directly with client companies.”

The (long) response was given by Jesse Norman MP, Financial Secretary to the Treasury on the 7^th of October 2019.  Here is the important part of the response:

“The off-payroll working rules (sometimes known as IR35) have been in place since 2000. They are designed to ensure that individuals working like employees pay broadly the same amount of tax and National Insurance Contributions, regardless of the structure they work through. They do not affect the self-employed.

Budget 2018 announced that reforms introduced in 2017 for the public sector would be extended to all sectors, from April 2020, giving businesses time to prepare. The Government has consulted extensively on the reform and HMRC are publishing guidance as well as delivering an education and support programme.

HMRC continue to work with stakeholders to make improvements to the Check Employment Status for Tax (CEST) digital service and wider guidance. Enhancements will be rigorously tested with stakeholders, and operational and legal experts, and will be available for use later in 2019.”

Global Payroll Association Comment

It is encouraging that the government recognises that this free tool will be relied upon by the vast majority of employers in both private and public sectors.  Employers should not have to pay for commercial tools when one is supposed to be available free by HMRC.  Yet it has proved unreliable to the point where employers have had little choice.

So it is good to hear that it is being “rigorously tested” and will be ready later this calendar year.  We hope that HMRC have also looked at the commercial tools that are available and realised that their free tool needs to be enhanced significantly.

With the advent of off-payroll working in the private sector set to become a reality in April 2020, many employers will rely HMRC’s Check Employment Status for Tax (CEST) digital service.  This has been widely criticised for being inadequate and giving out questionable status determinations.  As a result, members have indicated to the Global Payroll Association that they have invested in third party providers at a cost. 

So it was interesting for us to read the parliamentary written question from Jonathan Edwards MP to the Chancellor of the Exchequer on the 2^nd of October 2019:

“To ask the Chancellor of the Exchequer, what progress HMRC has made on establishing a status disagreement process to ensure that contractors can raise concerns directly with client companies.”

The (long) response was given by Jesse Norman MP, Financial Secretary to the Treasury on the 7^th of October 2019.  Here is the important part of the response:

“The off-payroll working rules (sometimes known as IR35) have been in place since 2000. They are designed to ensure that individuals working like employees pay broadly the same amount of tax and National Insurance Contributions, regardless of the structure they work through. They do not affect the self-employed.

Budget 2018 announced that reforms introduced in 2017 for the public sector would be extended to all sectors, from April 2020, giving businesses time to prepare. The Government has consulted extensively on the reform and HMRC are publishing guidance as well as delivering an education and support programme.

HMRC continue to work with stakeholders to make improvements to the Check Employment Status for Tax (CEST) digital service and wider guidance. Enhancements will be rigorously tested with stakeholders, and operational and legal experts, and will be available for use later in 2019.”

Global Payroll Association Comment

It is encouraging that the government recognises that this free tool will be relied upon by the vast majority of employers in both private and public sectors.  Employers should not have to pay for commercial tools when one is supposed to be available free by HMRC.  Yet it has proved unreliable to the point where employers have had little choice.

So it is good to hear that it is being “rigorously tested” and will be ready later this calendar year.  We hope that HMRC have also looked at the commercial tools that are available and realised that their free tool needs to be enhanced significantly.