Evidence given by BBC Director General Lord Hall to the Public Accounts Committee (PAC) this week confirms HMRC’s CEST (Check Employment Status for Tax) tool is not fit for purpose, IPSE (the Association of Independent Professionals and the Self-Employed) has said. Contributor Policy Jordan Marshall, Development Manager – IPSE
This week a meeting of the PAC was held to discuss the claim that the BBC had forced its presenters to form Personal Service Companies to receive their pay.
According to the BBC representatives, the presenters’ self-employed status was deemed legitimate before the introduction of CEST (Check Employment Status for Tax), but the tool found 95 per cent of them should actually be considered employees.
At the PAC meeting, representatives of the BBC repeatedly criticised the performance and swift introduction of the CEST tool.
BBC Director General Lord Hall said: “From 2017 onwards, we were surprised by the way the outcomes of the tests that we had been applying perfectly legitimately and properly before were suddenly changed by CEST.”
He warned: “HMRC should be thinking very hard about the difficulties created by rushing into something which was more global in nature, and which we still haven’t worked through the consequences of now.”
IPSE’s Policy Development Manager Jordan Marshall commented: “IPSE has been warning about problems with the CEST tool for some time, and these revelations are just another nail in its coffin.
“The CEST tool massively oversimplifies hugely complex tax legislation to come out with clearly incorrect judgements – which have been overruled by several recent employment tribunal cases.
“CEST is simply not an effective tool for judging the employment status of the UK’s workforce. Especially when the government is pushing through drastic changes to self-employed IR35 tax law, it cannot and must not rely on such a cumbersome, blunt-edged tool to determine who is and who is not self-employed in the UK.
“The CEST tool should be reviewed and if it cannot be made fit-for-purpose, should be scrapped altogether.”
