HMRC ignored damning CEST feedback by hundreds of users.

Half of users rate tool as bad or very bad.

A Freedom of Information (FOI) request from ContractorCalculator has discovered that a poll conducted by HMRC into its Check Employment Status for Tax (CEST) tool revealed that 50 per cent of respondents described CEST as ‘bad’ or ‘very bad’. The poll only recorded 29 per cent thinking the tool was ‘good’ or ‘very good’.

The data, which has been gathered by the taxman since CEST was introduced, confirmed that CEST has been used in excess of 800,000 times, with 556 users opting to provide feedback. When asked what they thought of CEST, 20 per cent claimed to be neutral. Only 10 per cent described the tool as ‘very good’, while just 19 per cent said that they thought CEST was ‘good’. Half of all respondents described CEST as either ‘very bad’ (30 per cent) or ‘bad’ (20 per cent).

Overall, 73 per cent of feedback was obtained during CEST’s first year of operation, with roughly half being gathered within the first four months. ContractorCalculator’s analysis of this feedback shows that already negative sentiment towards CEST worsened significantly following the tool’s first four months of existence:

  • Negative sentiment (‘bad’ or ‘very bad’) increased from 44 per cent to 56 per cent
  • Positive sentiment (‘good’ or ‘very good’) fell from 34 per cent to 25 per cent
  • First four months excluded, 106 of respondents described CEST as ‘very bad’ compared to just 29 who described it as ‘very good’.

According to users, the most prominent issues with CEST included: ambiguous questions which are impossible to interpret with certainty; questions which are deemed irrelevant to the sector in which the user operates; the questionnaire’s failure to cover all aspects of IR35 and issues with functionality making the questionnaire impossible to complete.

“These results are damning,” commented Dave Chaplin, CEO and founder of ContractorCalculator. “Right from the outset, the public made HMRC aware that CEST wasn’t up to the job and, over time, more of the tool’s failings have become apparent and dissatisfaction has grown. Despite this, HMRC is still yet to make any changes to CEST and continues to champion the tool whilst still not formally testing it.

“At a recent Public Accounts Committee (PAC) hearing on the Off-Payroll rules in the public sector, we heard HMRC’s second permanent secretary Jim Harra saying that ‘we engaged with all public sector bodies to make sure that they had the support to apply the tool correctly. We monitored the feedback on the use of the tool as well and we are committed to making improvements to it over time to push its response rate as high as possible’ later adding ‘what we are satisfied with is that the CEST tool is a high-quality tool which gives the correct answers when used correctly’.” Continued Chaplin. “These claims are dubious in light of the new evidence we have obtained. How HMRC can consider itself to have done a sufficient job beggars belief.”

“The fact that HMRC omitted the CEST feedback from its consultation once again reinforces that the off-payroll rules in the private sector were always a foregone conclusion,” claims Chaplin. “The taxman attempted to bury the evidence because it didn’t suit its CEST narrative. Now the truth is out, it’ll be interesting to see how HMRC attempts to explain this one.”

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