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HMRC urged to sort out IR35 tool within next four months

HMRC is being advised to have the adjusted version of CEST, its IR35 tool, up and running by October at the latest to enable businesses in the private sector to be able to cope with April 2020’s IR35 reforms.

The Chartered Institute of Taxation (CIOT) has stated that October is the final date that the revised version of CEST can be made public if contractors and companies are to have any realistic chance of adapting smoothly to the IR35 changes. If the modified CEST is made available by then, it will give those in the private sector likely to be affected by the reforms a six-month period during which they can look at current and new contracts.

The CIOT also stated that this is the minimum period that will be needed for the revised CEST to be bedded in, ahead of HMRC determining which companies are liable under the reformed IR35.

It made the recommendations as part of the recent consultation into these tax changes, further arguing that the revised version of CEST needs to offer greater flexibility to meet the needs of contractors with different circumstances.

Problems with the earlier version made contractors more reliant than ever on reputable self-assessment accountants to ensure they were in compliance.

Other bodies, including the Institute of Chartered Accountants in England & Wales, are suggesting that the April 2020 date for the IR35 private sector launch is too soon and that it should be pushed back until Spring 2021.

Posted by Louise
June 18, 2019

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