blog header image

Posted : 04 Sep 2018 at 07:32:19
Category: News

Share this article

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, HM Revenue & Customs’ “check employment status for tax” (CEST) tool comes to the wrong conclusion in almost half of cases.

Experts say confusion over changes to the law introduced last year mean many genuine contractors are forced to pay tax as if they were employed without receiving benefits like holiday and sick pay.

He added: "HMRC is failing in its duty of care to make sure the right amount of tax is collected. It seems HMRC is trying to get the most amount of tax rather than the right amount. These people are being forced into false employment.”

It found that the CEST tool was only accurate in 14 of the 24 cases reviewed and was wrong in seven instances.

The change shifts the responsibility from the contractor to the hiring organisation, resulting in many large organisations making so-called blanket decisions and wrongly classifying workers as inside IR35.

This may result in contractors paying income tax at a higher rate, as opposed to corporation tax which is usually lower.

A spokesman for HMRC said: “The CEST digital service was rigorously tested throughout development, with input from external stakeholders, in accordance with government data standards prior to release. Results have been tested by HMRC against known case law and settled cases.”


Source : https://www.telegraph.co.uk/tax/self-employed/hmrc-contractor-tax-testing-tool-wrong-almost-half-cases/


SIMILAR NEWS

blog header image
NEWS
CONSTRUCTION GROWTH SLOWS AS COSTS “GO THROUGH THE ROOF”

The pace of construction growth slowed in August as buyers reported near record rises in input cost inflation.       The bellwether IHS Markit/CIPS UK Construction PMI Total Activ ...

blog header image
NEWS
SUBCONTRACTORS HIT OUT AT HMRC OVER SLOW VAT REPAYMENTS

Specialist contractors have hit out at HMRC over the time it takes to reclaim VAT payments following a controversial change in the tax regime earlier this year. The “domestic reverse charge&rd ...

blog header image
NEWS
LABOUR COSTS ‘BREAK RECORDS’ AS VACANCIES SOAR

Recruiters have reported “record-breaking” increases in labour costs as new data shows vacancies hitting fresh highs. Between May and July, there were 38,000 vacancies in the construction ...

blog header image
NEWS
TIMBER SHORTAGE DUE TO 'UNPRECEDENTED' POST-LOCKDOWN DEMAND

The price of timber has risen sharply with builders struggling to get supplies, as post-lockdown construction and DIY projects create huge demand. The Timber Trade Federation (TTF) said supplier ...

blog header image
NEWS
UK CONSTRUCTION FACES ‘PERFECT STORM’ AS SUPPLY SHORTAGES LOOM

UK construction is facing a “perfect storm” of growing skills and materials shortages as demand for building reaches record levels driven by home improvements, the housing market and new i ...

blog header image
NEWS
DEMAND FOR CONSTRUCTION WORKERS CLOSE TO 20 YEAR HIGH

The staff shortage in construction is continuing to bite, with 33,000 job vacancies for the period of April to June according to the latest figures from the Office for National Statistics. It is the s ...

business-directory Business Directory
smartbusinessdirectory Payroll Services Business Directory
truebusinessdirectory payroll-services Directory
payroll-services Directory