- Demystify HMRC’s CEST tool;
- Provide guidance to HMRC’s Employment Status Manual that is relevant to CEST;
- Provide guidance to HMRC’s CEST guidance;
- Enable you to accurately use the tool so HMRC will stand by the results;
- Enable you to produce a Status Determination Statement (SDS);
- Help you with the Status Disagreement Process (SDP);
Who is this for
The Check Employment Status for Tax (CEST) tool is HMRC’s digital tool for determining whether someone is employed or self-employed. Rebecca Seeley Harris has written this book to explain how the tool works interpreting it from HMRC’s point of view. This will hopefully help taxpayers use the tool more effectively.
CEST Explained is written by Rebecca Seeley Harris who has been specialising in employment status and the self-employed for over 20 yrs. Rebecca frequently writes on the subject for the professional and mainstream press, speaks at conferences and was a Senior Policy Adviser to the Office of Tax Simplification.
Check Employment Status for Tax (CEST)
The CEST tool is HMRC’s tool for determining whether an individual is employed or self-employed for tax purposes. It is likely to be used predominately at present for status determinations under the off-payroll working reforms (OP21) (sometimes referred to as IR35) which are due to come into force on 6 April 2021. It can also be used for determining the status of a self-employed individual. It can be used by both the client and the worker, although it is the client’s legal responsibility under OP21 to assess status and issue a Status Determination Statement. The worker may want to use CEST to either check the client’s SDS or to challenge the SDS under the Status Disagreement Process.
The purpose of this book is to demystify HMRC’s Check Employment Status for Tax tool (CEST). It is well known that the CEST tool has been criticised, mainly for HMRC’s stance on mutuality of obligations, but also because the questions are not that easy to understand. The problem is that for HMRC to stand by the determination of the CEST tool, the input needs to be accurate and you need to have used HMRC guidance. So, this book will hopefully provide both, enabling you to be accurate by understanding the questions and bringing together HMRC’s guidance.
The guidance in this book is not my own interpretation of case law, but how I think HMRC have interpreted case law using their own guidance. In order to use the CEST tool accurately, it must be based on HMRC’s interpretation, not mine or the courts. I have used the questions direct from the CEST tool online as at the date of publication of this book. I have also used the information from HMRC’s CEST guidance and the Employment Status Manual. You will see reference to the ESM, which is the Employment Status Manual and the CEST – which is the CEST guidance.
From April 2021, the output from the CEST tool can be used as a Status Determination Statement (SDS) to comply with the off-payroll working reforms (OP21). The SDS can be used to send to the worker and any third party that is involved in the labour supply chain. It can also be used by the worker as part of the Status Disagreement Process (SDP).
Running alongside CEST Explained is CEST Training. This is online training using video conferencing. You can book a bespoke session with Rebecca Seeley Harris to guide you through HMRC’s CEST tool and answer your specific questions. Every industry has their idiosyncrasies which CEST doesn’t accommodate and Rebecca can help explain how to deal with these. Very often it is difficult to deal with an ‘unable to determine’ result. The training will also help with this as well.
“Thank you for the great job you’ve done for the Office of Tax Simplification… Your knowledge of employment issues and your ability to unpick the most technical aspects of legislation has been very valuable for the OTS… As has been your hard work in developing the OTS response to the issues faced in the gig economy.”
Philip Hammond, Chancellor of the Exchequer (2019)
“Thank you for the great job you have done for the Office of Tax Simplification and for all the support you have given to John Whiting and Jeremy Sherwood on the employment status review. Your expert legal knowledge and experience has been really valuable for the office, as has been your skill in helping to put together the very impressive final report.”
George Osbourne, Chancellor of the Exchequer (2016)