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Concerns about using the CEST Tool

In recent years, many businesses have increasingly relied on the CEST (Check Employment Status for Tax) tool to determine the IR35 status of their contractors. While the CEST tool might seem like a convenient and straightforward solution, there are significant reasons why it should not be used as the primary method for IR35 assessments:

Significant Limitations

The CEST tool fails to account for all the complexities involved in determining employment status. Its simplistic approach can lead to potentially inaccurate assessments, exposing businesses to the risk of non-compliance.

Lack of Updates

The CEST tool has not been adequately updated to reflect changes in case law and HMRC guidance. This outdated approach means it may not align with the latest legal standards, further increasing the risk of incorrect determinations

Past Penalties

A stark example of the tool’s limitations is the case of Defra (Department for Environment, Food & Rural Affairs), which faced substantial fines due to reliance on CEST. Defra alone was fined £48 million for inaccuracies in their IR35 assessments, highlighting the financial risk of depending on this tool.

Using the CEST tool does not demonstrate reasonable care and leaves your business exposed to penalties. To ensure compliance and safeguard your business from potential fines, it is crucial to employ reliable methods and seek expert guidance.

How Brookson Legal Can Help

At Brookson Legal, we offer a people-centric approach rather than relying on an impersonal tool. Our specialists take the time to understand your business, ensuring that reasonable care is taken in every IR35 assessment. Here’s how we can support you:

  • Comprehensive Assessments: Our experts conduct thorough evaluations, considering all relevant factors and nuances that the CEST tool may overlook. We explain the reasoning behind each outcome and what it means for your business.
  • Tailored Advice: We provide personalised advice on how to communicate IR35 determinations down your supply chain, ensuring clarity and compliance at every level.
  • Documented Process: Our portal stores all assessment information, so if HMRC ever questions your processes, you can easily demonstrate the steps taken and the care exercised.

If you have any questions about your current IR35 process or would like to discuss how we can support your business, get in touch with our team. We’re here to help you navigate the complexities of IR35 compliance with confidence and ease.