HMRC: We 'rigorously tested' IR35 tax-check tool... but have almost nothing to show for it

www.theregister.co.uk | 2/8/2019 | Staff
jesse456 (Posted by) Level 3
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The UK taxman has been slammed for a lack of transparency over the assessment of its tool to check contractors' tax status amid claims it has not retained full records of testing.

HMRC created the Check for Employment Status for Tax (CEST) service in March 2017 as the government cracked down on off-payroll working rules, known as IR35.

Process - Cash - Contractors - Responsibility - IR35

This online process was designed to squeeze more cash out of contractors by shifting responsibility for determining IR35 status from the employee to the employer.

HMRC launched CEST as a voluntary tool to help assess whether workers were classed as IR35 – but, according to the GOV.UK page, it is still in beta.

Critics - CEST - Inaccurate - Bodies - Tests

Critics have slammed CEST as inaccurate, with contracting bodies claiming their own tests consistently find it returns flawed assessments.

HMRC has disputed these claims, saying CEST has been "rigorously tested during development in conjunction with HMRC's lawyers against live and settled cases and reflects employment status case law".

Documentation - Freedom - Information - Request - Year

But when asked to reveal documentation on that testing through a Freedom of Information request last year, the taxman said the CEST rules were "developed in a workshop" and the only documented output was those rules.

HMRC added it didn't create and or have a list of court cases or settled cases used to develop CEST, but that it had a "very similar" list of cases and test results after the tool had been developed. This lists 24 cases with decisions from the court, CEST and appeal.

Records - Existence - HMRC

There are no records in existence that HMRC are able to provide.

ContractorCalculator CEO Dave Chaplin, who submitted the FoI request, was unsatisfied with the response and so submitted further ones seeking more documentation.

Responses - Month - Register - HMRC - Record

But the responses, received last month and seen by The Register, show that HMRC has no record of any testing since that point – suggesting the only documentation HMRC holds...
(Excerpt) Read more at: www.theregister.co.uk
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