Payroll
of the services of the end-user. However, the question of whether the worker enjoys employment rights is now focused on corporate benefits such as gym membership and employee discounts. Worker contracts The most significant change to the tool is a whole new section on worker contracts. This appears to be a shift in emphasis and considers the position of the worker in terms of the flexibility they have within the contract and what work they do elsewhere. Effectively, this alludes to the principle of mutuality of obligation (MOO), which was not considered at all in the previous version. MOO is the concept of the obligation on the part of the engager to offer work to the individual and the individual’s obligation to accept it. Recently, we have seen HMRC effectively dismiss the significance of MOO by arguing that it is present in any contract – whether one of employment or self-employment – and is not in itself a key determinant of employment status. However, recent tax case law has reinforced the notion that MOO is a significant factor regarding employment
status, so perhaps the revised CEST is an acknowledgment by HMRC – albeit reluctantly – that this is the case. ...reinforced the notion that MOO is a significant factor regarding employment status... In considering these issues the CEST now asks the following: ● Does this contract stop the worker from doing similar work for other organisations? ● Is the worker required to ask permission to work for other organisations? ● Has the worker had a previous contract with your organisation? ● Will this contract start immediately after the previous one ended? ● Is the current contract the first in a series of contracts agreed with your organisation? ● Will this work take up the majority of the worker’s available working time? Financial secretary to the Treasury, Jesse Norman, commented that: “We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules. The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.” The review, which will conclude by mid-February, will engage with affected individuals and businesses on their experiences of the implementation of these reforms. The government will: ● hold a series of roundtables with stakeholders’ representative of those affected by the reform, including contractor groups and medium and large-sized businesses, to understand how the government can ensure smooth implementation of the reforms, and ● carry out further internal analysis, including evaluation of the enhanced CEST tool
● Has the worker done any self-employed work of a similar nature for other clients in the last twelve months? Therefore, unlike the previous version, this includes questions on what the worker does outside the contract under consideration rather than just within the contract itself.
Conclusion The new version has a more comprehensive feel to it with what
would seem to be an attempt to get a more accurate answer. The addition of the questions regarding the worker’s contract will be broadly welcomed as it has long been argued by many that these all form part of the way the worker provides their services to the end-user and others. However, there is a danger that a significant number of new questions in this area could in fact result in more ‘unable to determine’ outcomes thus creating more uncertainty. It is still early days of course and only time will tell. Ultimately, CEST is a tool to assist in making a decision on status and it is only fair that it takes into account all the relevant factors. n
CEST review F ollowing the chancellor’s announcement made on 30 November 2019, a review into implementation of changes to the off-
and public sector bodies’ experience of implementing the reform to the off-payroll working rules in 2017. The off-payroll working rules do not affect the self-employed, as only those working like employees are in scope. As part of the review, the government will explore whether there are any further steps it could take to support businesses in correctly determining employment status. In parallel to the review, HM Revenue & Customs will continue its comprehensive programme of education and support activities, proactively helping customers to prepare for the reform to off-payroll working rules in April 2020. This will include one-to- one engagement, webinars and workshops alongside targeted communications and support for customers, and their representatives to help them prepare for implementation on 6 April 2020. n
payroll working rules was launched by the government in early January. This review will determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms, which are due to come into force in April 2020. As part of this, the review will also assess whether any additional support is needed to ensure that the self-employed, who are not in scope of the rules, are not impacted. The government will launch a separate review to explore how it can better support the self-employed. That includes improving access to finance and credit, making the tax system easier to navigate, and examining how better broadband can boost homeworking.
25
| Professional in Payroll, Pensions and Reward |
Issue 57 | February 2020
Made with FlippingBook - Online magazine maker