CEST Check Employment Status for Tax Tool
Published / Last Updated on 18/08/2021
Are you a contractor? Are you a business that uses contractors to outsource work, services or development?
Many will be aware of IR35 builders and their sub-contractors where a number of years ago HMRC clamped down on firms that were engaging sub-contractors e.g. brick layers, plumbers, electricians on a full time basis but treating them as self employed to avoid employee status and thus avoid employers national insurance contributions, sick pay, holiday pay and pension contributions et al.
IR35 clamped down on this and forced businesses across many sectors to verify the status of their workforce and establish whether workers were in fact employees rather than self employed or contractors through ‘shell’ companies.
HMRC has had a Check Employment Status for Tax Tool (CEST) for some time but it has only recently start to promote it.
If you are a business and your workforce are self employed or contractors, you are required to verify each worker’s status. Indeed, we have had to do the same with our own web design technical consultant.
In simple terms:
- If you have an agreed contractor for numbers hours or a daily rate or similar, you need to be careful just in case they cross over to employment status.
- Does the contractor control when they work or do you?
- Does the contractor work exclusively for you?
- Can the contractor take on or do they have other ‘clients’?
- Who decides what work is to be done and when?
And many more questions like this.
The CEST will allow both hirers and contractors to establish their employment status and therefore, make the right employment or contractor national insurance and income tax arrangements.
The Tool:
https://www.gov.uk/guidance/check-employment-status-for-tax
HMRC Webinar:
https://register.gotowebinar.com/rt/4406215199334771725?source=Agent-Invite-18
Comment
We have used the tool and it was very easy to follow, navigate and use.
