IR35 changes – April 2020

How to determine a freelancer’s status


Although clients will need to apply the normal employment status tests (based on case law – see our helpful tips, here ) to decide whether someone is a “disguised employee”, it can be difficult to do so, and that difficulty is aggravated by the fact that H M Revenue & Customs’ (“HMCR”) view of status in a case cannot necessarily be regarded as correct. Where HMRC has brought cases to tax tribunals to contest the status of contractors, it has lost a large percentage of those cases. HMRC provide a tool, the Check Employment Status Tool (“CEST”), which clients may (but do not have to) use to assess employment status. Many public sector clients have found CEST to be, in their view, somewhat biased towards finding that an individual is an employee but HMRC has said that it will enhance CEST to make it more suited to the private sector.

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