In IR35

The Association of Independent Professionals and the Self Employed (IPSE) has called for an independent review of HMRC’s heavily-criticised Check Employment Status for Tax (CEST) tool.

Recounting a revealing select committee hearing concerning BBC remuneration, which he attended in March, IPSE’s Policy Development Manager, Jordan Marshall, said that the tool’s inadequacies were clearly exposed during the meeting. The session heard of the appalling stress inflicted on affected BBC contracting professionals after being threatened with court action during IR35 investigations. One radio presenter disclosed that she had attempted suicide.

Several presenters testified that the CEST test was unfit for purpose. Radio Four Front Row host, Kirsty Lang, insisted that the tool totally fails to apply to the kind of work she and her fellow professionals undertake, while BBC Director-General, Lord Hall, said that it had resulted in considerable confusion for the individuals affected.

Marshall says that it is now unambiguously obvious that the tool cannot handle the intricate reality of IR35. HMRC’s presumption that Mutuality of Obligation (MoO) is present in all engagements has, he notes, been “fatally undermined by recent tax tribunal cases”.

Industry experts have highlighted major flaws with the instrument. Tania Bowers of the Association of Professional Staffing Companies (APSCo), for example, has publicly emphasised widespread distrust  in the test’s methodology. HMRC, she insists, should modify the instrument, making it compliant with case law and the case-by-case approach currently used by experts in the field. Failing that, it should be replaced.

CEST has caused disruption in other sectors besides the media. In the health sector, rising numbers of contracting medical professionals have found it strenuous to operate in the NHS. The Secretary-General of the Independent Health Professionals Association (IHPA) recently denounced the “rigging of the…digital tool and kangaroo court assessments across the whole public sector”.

Respected tax expert, David Kirk, has attacked the tool for its ‘tick-box mentality’, which legal tribunals insist are unsuitable for determining employment status. He went on to say that it was now becoming inevitable that tribunals will arrive at conclusions that overturn CEST determinations, adding “and then where will we be?”

Marshall calls on policymakers to accept the blunt fact that CEST assessments have produced havoc in the public sector – delayed projects, talent shortages and an exodus of contracting professionals. Ministers, he said, needed to revaluate CEST and refrain from undermining the whole economy by extending identical errors to the private sector. Calling for an independent review of the CEST instrument to restore confidence, Marshall concluded:

“If the review finds CEST is not up to the job, the only option will be to abolish it altogether.”

Recommended Posts

Leave a Comment