Contractors and the self-employed are being routinely misled by an official Government tool which is meant to give clarity over employment status.
According to a 14-month investigation by advice website Contractor Calculator, HMRC's “check employment status for tax” (CEST) tool comes to the wrong conclusion in almost half of cases.
- CEST only returned a properly correct outcome in 14 out of 24 cases – just 58%.
- 7 cases (29%) resulted in CEST giving the wrong answer.
- 3 cases gave the right answer, but for the wrong reasons – called “false positives”
- 3 of the cases which passed (of the 14) demonstrated an over-reliance on substitution, which otherwise would not have produced the correct result, contrary to the courts direction.
Tax does have to be taxing.
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