HMRC refutes findings from ContractorCalculator survey

HM Revenue & Customs has slammed claims thousands of contractors are not using its IR35 status tool.

Findings from a survey of 6,000 contractors from online contracting site ContractorCalculator, released this morning, revealed just one in 10 contractors polled are using HMRC’s Check Employment Status for Tax (CEST) IR35 status tool.

Of the 1,100 contractors who said they used the tool in the survey, 25% are being given an ‘IR35 does not apply’ result, when ContractorCalculator maintains that IR35 should definitely apply.

The company further claims 45% of the ‘IR35 does not apply’ results being handed out by HMRC are based solely on substitution and do not take any other factors into account.

But in a strongly worded response, HMRC disputed the survey’s findings in a statement sent to Recruiter.

“The survey does not present a true picture, and the assertions made are totally inaccurate – the CEST service has been used more than 450,000 times already, and public sector organisations are using it routinely.

“CEST provides a result in 85% of cases, and for the 15% of complex cases where a result is not provided, we have advisers available to talk through the issues.

“Any right of substitution must be exercisable in reality and not simply a contractual clause – decisions on employment status should be based on what would happen in practice, not just what it says in the worker's contract.”

• What is your experience of the CEST service? Do you agree with the results from the survey or is HMRC right to dispute the findings? Email us at [email protected] or tweet us below to tell us your thoughts. We will run comments online in a round-up at the end of the week.

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