BBC presenters mock ‘ridiculous’ CEST
The taxman’s IR35 digital tool (‘CEST’) has taken a bruising at a select committee hearing on the BBC’s use of personal service companies.
Criticisms of the tool ranged from “not fit for purpose” and “impossible” to answer, to ‘unreflective of case law’ and “indeterminant” for the wide range of jobs which taxpayers have.
Issued by BBC presenters quizzed by the committee, the criticisms were quickly understood, with one MP saying it sounds as if CEST ‘tries to fit a square peg into a round hole.’
Paul Lewis, a Radio 4 DJ, revealed that the BBC has been trying to change CEST – launched as the ‘ESS’ but rechristened ‘Check Employment Status for Tax’ shortly afterwards, but has had “very limited success.”
Elsewhere at the select committee hearing, the complaints about CEST even became laughable – literally, thanks to an anecdote from BBC 6 Music’s Liz Kershaw.
“This is how ridiculous it is,” the radio presenter began. “He [an adviser I ran CEST with] actually said this with a straight-face. ‘Have you ever had to buy any capital, plant or machinery?’
“I said ‘Does a CD player count?’ ‘No’ [he said]. ‘So if I came into Broadcasting House next Saturday in a brand new JCB; would THAT qualify me for self-employment!?’”
The adviser, who dourly responded ‘I don’t think so,’ lacked a sense of humour according to one chuckling MP at yesterday’s hearing. But an advisory on IR35 says there is a serious side to CEST’s shortcomings.
“Despite promises to review the tool used to set IR35 status, CEST remains flawed,” says Seb Maley of Qdos.
“The technology has been tweaked on-the-fly and has been known to be contradictory too. But it must be remembered that it isn’t mandatory, and independent assessments are perfectly acceptable too.”
His comments follow Qdos research showing 85% of contractors do not trust CEST and, as of February his year, 81% would not work with a client if they only used CEST.
Meanwhile, in his evidence, Mr Lewis hinted why it might not be trusted, as he said the HMRC-programmed tool has deemed 97% of PSCs at the BBC as owing employment taxes.