HMRC refutes ContractorCalculator claims of CEST inaccuracies

HM Revenue & Customs has expressed confidence in the accuracy of its Check Employment Status for Tax (CEST) as the tool has come under increasing scrutiny.

A statement from contracting authority ContractorCalculator, released this morning, claims HMRC has conceded that the tool has still not undergone any formal testing to produce detailed evidence of its accuracy claims since its release almost two years ago, despite repeated claims from HMRC and the Treasury that the tool is under continual review. HMRC had also revealed an informal assessment conducted to ensure that CEST meets the Government’s Digital Service (GDS) Standards, used “to check whether a service is good enough for public use” has also not been carried out.

Responding to a Freedom of Information request from ContractorCalculator, HMRC said: “No further documentation has been created since April 2018 where CEST has been subsequently tested against court cases,” referring to around 24 employment status cases provided in response to a previous FOI request made by ContractorCalculator in April 2018.

ContractorCalculator claims HMRC had attempted to use the single page of claims as proof of CEST’s accuracy but added their own rigorous re-testing against the 24 cases produced 511 pages of evidence which found the tool returned a flawed assessment 42% of the time. 

Commenting further, ContractorCalculator CEO Dave Chaplin said: “HMRC imposed CEST upon the public sector and by doing so has cheated many honest taxpayers out of thousands of pounds in the process with a tool that is not fit for purpose and does not work.

“We debunked HMRC’s claim that CEST is accurate and by doing so we thought that the taxman might make some effort to vindicate its tool but, two years on, we can see that CEST has been stuck in beta mode since its inception. 

“HMRC has pledged to work with stakeholders to improve CEST but the reality is that it has not been working on the tool and has continued to issue tax bills off the back of faulty results. It will be interesting to see what enhancements HMRC is planning to make in preparation for rolling out off-payroll into the private sector.”

When contacted by Recruiter this morning, an HMRC issued a statement saying the CEST tool reflected employment status case law and had been “rigorously tested” throughout its development.

“Its use is advisory and not mandatory, but we are confident in CEST’s accuracy and stand by its output when it is completed in line with our guidance.

“GDS Standards assessments are only required for transactional services, which allow users to exchange information, goods or services. As CEST is a tool for guidance purposes, not a transactional service, a GDS assessment was not appropriate.”

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