Is HMRC\u2019s misfiring IR35 engine about to cause a pile-up, asks Dave Chaplin.<\/p>\n\n\n\n
Suppose your car engine repeatedly misfires after years of maintenance neglect, making it unsafe to drive. You pop it into the garage, but instead of the mechanics lifting the bonnet and fixing the engine, they repaint the vehicle and claim it\u2019s in much better shape. Would you be happy with that service? Probably not.<\/p>\n\n\n\n
Well, that\u2019s the direction HMRC are heading after neglecting the underlying engine in their Check Employment Status for Tax (CEST) tool for years, having failed to deliver on its promise to Parliament to keep it updated with the law. Although the Court of Appeal laid down binding legal principles a year ago, highlighting that CEST\u2019s logic was wrong, CEST has not been fixed.<\/p>\n\n\n\n
Instead, rumours are that CEST will receive a lick of paint but that the decision engine will stay tuned to HMRC’s outdated \u2018policy view\u2019 of IR35 status. So, with the CEST engine remaining unreliable, what do the 40,000 private sector firms, who may still use it, need to watch out for?
Let\u2019s start from the beginning. What is CEST?<\/p>\n\n\n\n
Download the full article below:<\/p>\n\n\n\n