Public Services > Central Government

HMRC reiterates efforts for IR35 tool development

David Bicknell Published 01 June 2017

Department, which has come under fire from online portal ContractorCalculator over its employment status tool, says it has consulted “extensively” and taken feedback on board to improve the solution


HM Revenue & Customs (HMRC) has defended its approach to creating the IR35 employment status tool.

It follow claims earlier today from the ContractorCalculator online portal that HMRC should go back to the drawing board, telling HMRC that a robust online test could not be developed within the short timeframe currently set.

HMRC said earlier today that the claims made by ContractorCalculator were “completely incorrect. We do not oblige anyone to use the tool but we stand by its results where correct information has been inputted in line with the guidance. If incorrect information is inputted, the results will be skewed but that has nothing to do with the reliability of the tool.”

Now HMRC has gone further, insisting that it consulted “extensively” on the Check Employment Status for Tax (CEST) in 2015 and 2016. It said, “Customers told us they wanted this kind of advice service and the increased certainty it provides. The CEST service has been successful.  It has been used more than 300,000 times by HMRC customers so far.”

It added, “Employment status for tax is binary. The CEST service helps customers have certainty by providing guidance about whether they are employed or self-employed for tax and whether the off-payroll tax rules (IR35) apply to them.”

HMRC said CEST gives an answer in the majority of cases. “Where CEST does not generate an answer, customers are then able to call a dedicated helpline staffed by specialists who can give them advice.”

HMRC added that CEST’s results have been tested by HMRC against known case law and settled cases.  It continued, “CEST is currently in its public beta phase and will continue to develop and improve. The service has a facility for our customers to feedback what they like or dislike and we have already used that to improve the wording of several questions.”

Related article:

HMRC hits back over accuracy of its IR35 tool



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