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CEST users feedback, obtained via FOI, reveals little confidence in tool

Feedback for HMRC’s Check Employment Status for Tax (CEST) service has revealed that there is little public confidence in the tool, despite HMRC’s insistence that CEST is popular among users.

The data, which has been gathered by the taxman since CEST was introduced, and obtained by ContractorCalculator via a Freedom of Information (FOI) request, contains little positive feedback for the tool.

  • Overall, 50% of respondents described CEST as ‘bad’ or ‘very bad’
  • Only 29% described the tool as ‘good’ or ‘very good’
  • Analysis of feedback shows perception of CEST has regressed over time
  • Despite negative feedback, HMRC is yet to update CEST.

Unsurprisingly, as it contrasts so sharply with the public perception of the tool the taxman has tried to foster, HMRC has opted to refrain from making the information public knowledge.

“HMRC has been inviting feedback of CEST since its launch and will be well aware that the general impression is overwhelmingly negative,” notes ContractorCalculator CEO Dave Chaplin. “Rather than acting on this feedback, HMRC has chosen to disregard it, while continuing to champion the tool –proving again that the taxman cannot be trusted.”

HMRC CEST feedback reveals severe negative sentiment

Responding to ContractorCalculator’s FOI request, HMRC confirmed that CEST has been used in excess of 800,000 times, with 556 users choosing to take advantage of the invitation to provide feedback. The results of this are damning.

When asked what they thought of CEST, 20% claimed to be neutral. Only 10% described the tool as ‘very good’, while just 19% said that they thought CEST was ‘good’. Half of all respondents described CEST as either ‘very bad’ (30%) or ‘bad’ (20%).

73% of feedback was obtained during CEST’s first year of operation, with roughly half being gathered within the first four months. ContractorCalculator 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% to 56%
  • Positive sentiment (‘good’ or ‘very good’) fell from 34% to 25%
  • First four months excluded, 106 of respondents described CEST as ‘very bad’ compared to just 29 who described it as ‘very good’.

When omitting ‘neutral’ responses from the sample size, and comparing feedback obtained in 2017 and 2018, the statistics are just as striking:

  • Between 2017 and 2018, negative sentiment increased from 60% to 69%
  • During this time, positive sentiment fell from 40% to 31%.

“Right from the offset, the public made HMRC aware that CEST wasn’t up to the job,” comments Chaplin. “Over time, as more of the tool’s inadequacies have become apparent, dissatisfaction with CEST has increased further. Despite this, HMRC is still yet to make any changes to the tool’s software since its launch, and still after two years it has not been formally tested.”

CEST user comments counter spurious taxman claims

Speaking about CEST at a recent Public Accounts Committee (PAC) hearing on HMRC’s application of the Off-Payroll rules in the public sector, HMRC second permanent secretary Jim Harra stated:

“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,” elsewhere adding: “What we are satisfied with is that the CEST tool is a high quality tool which gives the correct answers when used correctly.”

These claims appear dubious in light of the new evidence, in particular the comments shared by users in providing feedback. Many of these have reinforced familiar criticisms that have been publicly levied against the tool yet ignored by HMRC. According to users, among the most prominent issues with CEST are:

  • Ambiguous questions which are impossible to interpret with certainty
  • Questions which are deemed irrelevant to the sector the user operates in
  • The questionnaire’s failure to cover all aspects of IR35
  • Issues with functionality making the questionnaire impossible to complete

In addition, many non-personal service company (PSC) contractors noted that they had been asked to complete CEST by hirers, despite not being within scope of the Off-Payroll rules.

“How HMRC can consider itself to have done a sufficient job in educating the sector, when some users cannot comprehend questions, and others are asking sole traders and employed consultants to use CEST, is anybody’s guess,” says Chaplin.

“Harra claims CEST to be a ‘high quality tool’, yet several of its users - who presumably aren’t employment status experts - have made the observation that it doesn’t cover the key aspects of IR35.”

Why was CEST data omitted from Off-Payroll consultation?

Despite being in possession of the data since its introduction in March 2017, HMRC didn’t see fit to include any of the CEST feedback within its Off-Payroll working in the private sector consultation document, published in May 2018.

The document, which has been heavily criticised for distorting the truth through cherry-picking facts and figures, instead drew on an HMRC-commissioned IFF Research report. This concluded that:

‘Half of public authorities report they found the public sector reform easy to comply with. Of those who found the reform easy to comply with, the most common reasons were that they had the right systems in place and HMRC’s CEST service allowed them to make quick and easy assessments.’

“So what if people are able to make ‘quick and easy assessments’? The emphasis should be on accuracy, which is the one claim HMRC has refrained from making on CEST’s behalf – because it has no evidence to back up the claim,” highlights Chaplin.

“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,” Chaplin concludes. “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.”

Published: 19 March 2019

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