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Judge rejects CEST assessment

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    Judge rejects CEST assessment

    Can't find reference to this yet.... very interesting?:

    CEST assessment rejected by judge as contractor recoups unlawfully deducted tax

    Shout99 : CEST test rejected by employment tribunal
    Last edited by Contractor UK; 25 May 2019, 11:21.

    #2
    Doesn't get much more clear cut than that. CEST is not fit for purpose.
    Last edited by Contractor UK; 25 May 2019, 11:19.
    "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

    Comment


      #3
      How can we get this news (the Judge's rule in particular) to the public and to the government before the Budget wrecks contracting even further?

      I hope this is something IPSE will take up with the Chancellor and his team.

      Comment


        #4
        A link to the formal tribunal docs and details of the judgement would be good. I guess it may take a little while for that to be available.

        Comment


          #5
          Hammond is about to open Pandora's box, as I mentioned here

          https://www.contractoruk.com/forums/...mployed-7.html

          Contractors forced inside IR35 (by risk-averse clients) can and will litigate to get their money back.

          Clients will have to take as much care declaring contractors inside as they will declaring them outside.
          Cats are evil.

          Comment


            #6
            Originally posted by DaveB View Post
            Doesn't get much more clear cut than that. CEST is not fit for purpose.
            For the same reason I wouldn't put all my faith in any client's 'outside' assessment to hold up if HMRC looked closer. HMRC are known for retrospective action to ensure rules are adhered to 'in spirit' where they haven't spelt things out clearly enough, and the current CEST reliability factor and IR35 itself plays into that too easily.

            I know others have said it's on the client if they are found to have filled in CEST incorrectly by HMRC and HMRC 'will stand by' a CEST determination, but I'd still be making sure the working practices and contract review is found outside IR35 by the established independent reviewing services. The cost of the review may be a small price to pay if HMRC change tack retrospectively. Only a moron trusts HMRC in any way shape or form to play with a straight bat.
            Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

            Comment


              #7
              Originally posted by Hobosapien View Post
              For the same reason I wouldn't put all my faith in any client's 'outside' assessment to hold up if HMRC looked closer. HMRC are known for retrospective action to ensure rules are adhered to 'in spirit' where they haven't spelt things out clearly enough, and the current CEST reliability factor and IR35 itself plays into that too easily.

              I know others have said it's on the client if they are found to have filled in CEST incorrectly by HMRC and HMRC 'will stand by' a CEST determination, but I'd still be making sure the working practices and contract review is found outside IR35 by the established independent reviewing services. The cost of the review may be a small price to pay if HMRC change tack retrospectively. Only a moron trusts HMRC in any way shape or form to play with a straight bat.
              Absolutely, anyoe with any sense will be taking the same precautions we always have re. IR35 status.

              The argument has always been that CEST is deeply flawed and does not produce reliable results. This judgement has exposed that for all to see and set a precendent that the results from a CEST review can be overturned.

              I'm surprised IPSE havn't been on this like a tramp on chips.

              Edit : Looks like they have released a statement on it although it is missing some of the detail from the report the OP posted. Specifically the fact that the claimant is now owed in the region of £9,500 in over paid tax and NI.

              Looks like these guys were the ones supporting his claim.

              The Law Place - Home
              Last edited by DaveB; 17 October 2018, 10:10.
              "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

              Comment


                #8
                Clearly, CEST is not fit-for-purpose, but it also isn't mentioned in any legislation and never will be. In pushing this, HMRC are mainly creating problems for clients w/ future litigation (including PS clients). My expectation is that the private sector will mostly not be using CEST; they will either make it very clear that a contract is inside (umbrella, FTC and/or other appropriate contract wording) or they will make it very clear that it's outside, which means not relying on CEST. Over time, CEST will become completely redundant, but it's certainly going to create some headaches for clients in the meantime. Ignoring the judiciary is part of the day job of gov't, so I wouldn't expect them to acknowledge that CEST is flawed, overwhelming evidence or otherwise It will just quietly become redundant.

                Also, given the way it's calibrated, it can't hurt to use as supporting evidence (to HMRC if not the courts) if you can get an outside decision.

                Comment


                  #9
                  Originally posted by DaveB View Post

                  Edit : Looks like they have released a statement on it although it is missing some of the detail from the report the OP posted. Specifically the fact that the claimant is now owed in the region of £9,500 in over paid tax and NI.

                  ICBW, but I suspect that will need to be claimed separately - the ET would be unlikely to rule on business taxes. Until the judgement is published, we're guessing. HMRC would have a hard time refusing that claim, but the mechanism remains unclear - it should not need to be via SA if it's business taxes.

                  Comment


                    #10
                    Originally posted by swamp View Post
                    Hammond is about to open Pandora's box, as I mentioned here

                    https://www.contractoruk.com/forums/...mployed-7.html

                    Contractors forced inside IR35 (by risk-averse clients) can and will litigate to get their money back.

                    Clients will have to take as much care declaring contractors inside as they will declaring them outside.
                    Who benefits? Hammond's mates at the consultancies.
                    The greatest trick the devil ever pulled was convincing the world that he didn't exist

                    Comment

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