5

IR35 Ongoing Checks

Hi Everyone! Firstly I’ve been a lurker for awhile and find this forum a massive help in my standalone HR Generalist role so thank you We are a growing organisation which has employees but also self-employed Associates who complete work on our behalf. When determining employment status what processes do you have in place and how often will you check this going forward…annually? With the amount of Associates we have we are wanting to put in a straightforward process which stops us falling foul of HMRC! Thanks in advance
619 views
  • Hi Angelica,

    The HMRC CEST (check employment status tool) is a what I have used plus an internal assessment to try and identify what category someone falls into.

    HMRC will only accept the first answer you get out of the CEST tool (basically so that businesses can’t punch in different answers until they get the one they want) - just a heads up!

    I would probably say the frequency you assess these individuals depends on how many of these engagements you have - I would suggest every 6 months to a year (6 months if you have a lot)

    Thanks!
  • Hi Angelica

    Organisation I use for consultants all have an IR35 online questionnaire which the client completes at the beginning of each assignment to establish IR35 status.
    Depending on the work undertaken it may be worth considering if this would be useful for you
  • Apologies for the delayed response I didn’t see these responses. Thank you Catriona this is really helpful, we also use the cest tool and I have created a checklist of questions to show due diligence. Could I ask what your internal assessment entails please?
  • Apologies for the delayed response I didn’t see these replies. Thanks Jo, is this a questionnaire that the organisation has created themselves?
  • In reply to Angelica:

    The CEST tool is widely and rightly criticised as being unreliable (and deliberately skewed to raise money.
    However assessing employment status for tax purposes is inevitably a tricky operation requiring skill honesty and a degree of luck given that Employment Tribunals can and do arrive at different conclusions to Tax Tribunals.
    Recent high profile cases have shown Government Departments being fined for getting it wrong (including the Courts and Tribunal Service)
    It is worth paying for skilled review