HMRC Pulls Wool Over NAO's Eyes

The National Audit Office’s (NAO) enquiry into HMRC’s Check Employment Status for Tax (CEST) tool has unfortunately provided little insight after HMRC responded to the questions posed by reiterating its policies and making unsubstantiated claims.

ContractorCalculator CEO Dave Chaplin, says:

“Unfortunately, the NAO appears to have fallen victim to HMRC’s tactic of responding to questioning with a number of stock responses that the contracting sector is now too familiar with.

From our extensive investigative work into CEST, we know that little of what the taxman says stands up to even the mildest scrutiny. HMRC has pulled the wool over the eyes of the NAO, which has unfortunately failed to conduct the cross-examination necessary to truly hold the taxman to account.

HMRC has continually employed the same tactics to avoid answering the important questions about CEST and the Off-Payroll rules. The failure of an official body to hold the taxman to account has enabled HMRC to blight the public sector by paralysing its flexible workforce. 

A comprehensive review of IR35 is essential not only to prevent further damage to UK plc and the economy come April 2020, but to hold HMRC to account and prevent it from further abusing its position.”

Tax does have to be taxing.

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CEST Tool Updated

HMRC has released an updated Check for Employment Status for Tax (CEST) service, used to find out whether a contractor or employer should be classed as employed or self-employed for tax purposes, and in-line with IR35 legislation.

Susan Ball, employer solutions tax partner at RSM, is quoted by AccountancyAge:

“It is understood that around 30 questions have been updated or included and that several industry bodies and reportedly more than 300 stakeholders were asked to use the new version and feed in comments. Until now CEST produced an answer in only 85% of cases.

The new tool has also been rigorously tested against case law and settled cases by officials and external experts. After answering a series of questions, the CEST tool will return a judgement on whether IR35 legislation applies or not. Questions cover worker’s duties, substitutes and helpers, working arrangements, financial risk, worker’s involvement and contracts (including if working for others).”

Anyone tried it yet?


Tax does have to be taxing.

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Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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CEST Is Irrelevant - HMRC Removes Its Own Tool!

What a surprise.... HMRC not doing what they said they would do - the minute the result doesnt suit them...
Firms who thought they could rely on CEST (after originally being promised this was the case by HMRC)....think again...https://t.co/dyxHNJaHpk

— Phil Manley (@pmanley82) July 1, 2019

As well as branding the application of CEST “irrelevant”, HMRC added: “While CEST can be helpful in providing guidance, it is only the application of the legislation and relevant case law to the hypothetical facts that must be considered by the tribunal.”

“It is disappointing that HMRC attempted to have the CEST analysis excluded as evidence. Even more so that it hasn’t conducted a detailed assessment itself to agree what the correct CEST determination should be,” comments Chaplin. “The taxman appears to be acting in bad faith. CEST was supposed to offer certainty to taxpayers, yet HMRC is removing this by ignoring its own tool.”

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's Defence of CEST Likended To Climate Change Denial

In an open four page letter Dave Chaplin, CEO of IR35 consultancy ContractorCalculator, accuses Hammond and HMRC CEO John Thompson of “refusing” to acknowledge the “hundreds of thousands” of grievances raised by users of the Check Employment Status for Tax (CEST) tool.

“You have brazenly disregarded the mounting evidence of CEST’s inadequacies while failing to provide anything credible to substantiate your own claims [that it works]..

Your public defence of CEST is akin to climate change denial. The evidence is indisputable and right before your eyes, yet you refuse to acknowledge it.”

HMRC have responded by saying that it is accurate.

Well then!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

CEST and HMRC's Definition of Rigour

HMRC claims that CEST has been "rigorously tested during development in conjunction with HMRC's lawyers against live and settled cases and reflects employment status case law".

However, ContractorCalculator CEO Dave Chaplin, who submitted an FoI request, was unsatisfied with the response and so submitted further ones seeking more documentation.

The responses, received last month and seen by The Register, show that HMRC has no record of any testing since that point – suggesting the only documentation HMRC holds on CEST's testing is the one-page case list.

"No further documentation has been created since April 2018 where CEST has been subsequently tested against court cases," HMRC said in one of the FoI responses, while pointing to the list of 24 cases.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

CEST Is Shite!

#HMRC FOI release: status cases tested against Check Employment Status for Tax (CEST) tool. https://t.co/PPAgW98R1B // @ContractorCalc said its own retesting showed that CEST "fares considerably worse" than HMRC suggested. #IR35

— Andrew Goodall (@agoodall4) August 23, 2018

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

CEST Tool Is Shite!

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.

The government and HMRC have yet to admit that it is shite.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's CEST is Crap

Last week I wrote about HMRC's slapdash CEST Tool.

The ICAEW has gone one better:

"HMRC’s check employment status tool (CEST) is not suitable for use in the private sector. 

HMRC has stated that CEST does not cover all scenarios, including the mutuality of obligations master and servant test, and that the tool was designed based on public sector contracts. 

Further, there are also no rights of appeal for individual workers who disagree with the CEST status decision."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's Slapdash CEST Tool

Oh dear, HMRC may have made another error wrt tax calculations.

The HR Director reports that more than 100,000 people could be facing incorrect tax bills as HMRC admits it has no detailed proof to demonstrate that its Check Employment Status for Tax (CEST) tool is accurate. 

The admission was extracted by a series of Freedom of Information (FOI) requests as part of a five month investigation by contracting authority ContractorCalculator. HMRC has stonewalled a series of requests for evidence and information from ContractorCalculator but finally responded to say that the taxman holds no detailed test data at all:

“The CEST tool testing was done by a workshop. The only documented output of the workshops is the set of rules used by the tool.

Our records show that HMRC has used the CEST tool to test all the cases cited in your request, but we do not have a record of how each question was answered as part of the testing, only the end determination.”

Following the release of CEST, HMRC has continued to champion its accuracy despite evidence from ContractorCalculator. The contracting site tested CEST against the historic IR35 cases in March last year and discovered that HMRC’s tool was unable to return the correct outcome in 37 percent of cases.

More recently, at a BBC select committee hearing, it was revealed that CEST had failed 97 percent of BBC broadcasters who had used the tool, prompting Jolyon Maugham QC to dismiss HMRC’s efforts at trying to achieve an “impossibly difficult” task.

Dave Chaplin, CEO and founder of ContractorCalculator said:

“I am incredulous that a fundamental piece of the CEST jigsaw is missing. For a tool of such importance, the lack of rigour involved in its testing methodology is astonishing. You have to wonder if HMRC has shredded any evidence to cover up CEST’s shortcomings?

HMRC publicly claimed that the CEST tool gives the right result provided the correct answers are entered into the tool but have chosen not to document any of those answers used during their testing process. There is a very simple way they can resolve this challenge – just publish the results of the 23 court cases, as put through CEST and prove their claims.

HMRC has taken a slapdash approach to building a tool that is clearly not fit for purpose, has not been tested properly and is missing important case law. HMRC tells us that it intends to release more information in April, so it will be intriguing to hear what HMRC has to say in its defence, a defence that seems to be unravelling as we learn more.

People’s lives and livelihoods are in tatters, not just at the BBC, as has been widely reported, but in other public services too. By forcing false employment upon people, HMRC could now face tens of thousands of claims for tax refunds and we won’t know what the scale of this is likely to be until January 2019 next year. 

Could this be HMRC’s PPI scandal? 

It’s even more appalling that HMRC wants to roll-out to the private sector the very same IR35 rules that have caused this chaos in the public sector. HMRC has significantly fallen down on its duty of care to businesses and tax payers.”

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"