• Helen White

Updated tool for IR35

HM Revenue and Customs (HNRC) has updated their Check of Employment Status (CEST) tool which is used to check the employment status of individuals for taxation. This tool will be used ahead of the pending introduction (6th April 2020) of the IR35 off-payroll rules for the private sector.

The CEST tool will be used to define whether a contractor or employer should be classed as employed or self employed for tax purposes, as part of the IR35 rules. It is critical that this tool gives the correct result as it will define whether the correct employment status has been applied.

The tool has been updated, and around 30 questions have been changed to reflect the lobbying from interested parties, the tool has been tested against case law with the CEST tool deciding whether or not IR35 legislation applies.

Currently all the main political parties are claiming that they will review the IR35 rules after the General Election as there are continued calls from industry experts that the tool will not give correct results in certain circumstances.

It is a complex area and if in doubt how this will affect your taxation and self-assessment status it is advised that you discuss with your accountant.

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