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Administrative Burdens Advisory Board publishes 2022 annual report which includes IR35 section

The Administrative Burdens Advisory Board (ABAB) published their 2022 annual report on 1st December 2022. Within the report contained a topic regarding off-payroll working rules.

ABAB reported that members of ABAB had contributed a “significant amount of time this year to advising on the implementation of extensions to the off payroll working (‘IR35’)”. They also stated that “ministers were reluctant to listen to the concerns of business and pushed ahead; despite several government departments receiving large penalties for incorrect application of the legislation”.

ABAB also reported that HMRC are “working very hard to improve the CEST to help businesses make a secure tax status determination” and that they look forward to seeing the improvements over the coming months.

Check Employment Status for Tax (CEST) is an online tool released by HMRC in March 2017 to provide guidance for firms looking to make status assessments.

Unfortunately, countless tests of CEST have found the tool to be inaccurate. An example of this is CEST’s small focus on Mutuality of Obligation (MoO), which is an important concept in employment law as it forms a key part of the criteria used by tribunals for determining the employment status of an individual.

It will be interesting to see whether HMRC will look to address the criticisms received regarding the tool such as MoO, or whether it will be another tick box exercise. The last update was in November 2019, where the tool was updated not to ask questions about the workers circumstances if the worker was not known at the time of completion.

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