The determination of the correct schedule of charge, in the public sector, is for the contracting authority to decide. The manager who is engaging with a supplier is required to use the HMRC check employment status for tax (CEST) tool.
The CEST tool provides HMRC’s view of the employment status (for tax purposes) of a particular engagement. It asks a series of questions about the circumstances, before providing an indicative determination on whether or not the engagement should be classed as employed for tax purposes.
The tool can reach a number of outcomes as listed below:
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the intermediaries legislation (known as IR35) does not apply to this engagement
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this engagement should be classed as self-employed for tax purposes
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unable to determine the tax status of this engagement
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this engagement should be classes as employed for tax purposes.
Full details of the procedure for engaging people who are claiming self-employed status can be found in St George’s employment status guidance.