CEST Tool- Who Can Use It?

Posted by JadenGarcia on August 29th, 2022

The worker's taxes will depend upon their employment status. Thus, the employment status for the tax and NICs work under specific criteria in the court. As a result, HMRC introduced the CEST Tool in 2017 to help the workers and employers figure out how the work should be dealt with for tax purposes.

In 2019, after working with 300+ stakeholders, HRMC launched an enhanced version of this tool. This act is taken out to make the tool clearer and error-free and ensure that the tool contains more information.

Thus, the question often arises of who can use these tool-only workers, just hirers, or just agency. Anyone who wants to understand the employment status for tax and NIC purposes can use CEST. Thus, let's check it out in detail about it.

CEST users-

As told CEST tool can be used by anyone. It includes-

An organization hiring workers

Any organization hiring workers can use the CEST tool to determine workers' employment status for tax purposes. Moreover, if the hires are engaged through intermediaries, then the organization is responsible for deciding the accurate employment status of the staff.

Meanwhile, suppose the hirer has already engaged the workers. In that case, the CEST will ask multiple questions to offer better results as the hirer will have more information about the worker's business.

On the other side of the book, if the hirer doesn't know who the worker is, then CEST will not ask any additional questions. However, the HMRC says that once the worker's identity is revealed, the organization can use the CEST tool to determine employment status.

A worker that provides their service

The medium and large organization in the private sector is highly responsible for determining whether the workers fall for the engagement with the IR35. Thus, the workers will also require the CEST tool to assess their employees' employment status.

Therefore, this test is for every organization's alternate engagement. Moreover, a worker can also use this test to check the determination of the hiring organization. This test includes a particular set of questions the worker needs to answer based on the analysis.

An agency that is placing a worker operation through an intermediary

If a company is a worker with the hirer, then the agency might have a direct connection with the hirer. Thus, an agency can place a worker with the help of management consultants for hirer in either a public sector, medium, or large organization outside the public sector.

Moreover, a hirer will inform the agency whether the IR35 is applied to the contract and worker. Therefore, there are high chances that an organization may know about the worker's circumstances. Thus, the agency can then use the CEST test to check whether the status reached by the hirer is accurate and based on the understanding of the contract or not.