Large or medium-size organisations that are paying workers via personal service companies or agencies will
need to operate new procedures from 6 April 2020. The new rules will apply to partnerships, LLPs and larger charities as well as limited companies. Only organisations classed as “small” under the Companies Act criteria will be outside of the new rules.

From 6 April 2020 the end user organisation will need to determine whether or not the worker would be an employee of the organisation if directly engaged. That determination will need to be communicated to the agency supplying the worker so that income tax and national insurance is deducted from any payments.

The end user organisation should use the Check Employment Status for Tax (CEST) software on the HMRC website. A copy of the determination should then be given directly to the worker.

What if the worker disagrees?

If the worker disagrees with the determination they should immediately contact the end user setting out their grounds for disagreement.

The end user must provide a response within 45 days of receiving the disagreement. During this time the original determination rules apply.

In other areas…

Tax tribunal decisions are still being decided against HMRC. In a recent case involving a radio
presenter working for TalkSport, it was decided that the presenter would not have been an employee if directly engaged. A key factor was that the level of control over the presenter fell far below the degree required to demonstrate a contract of service.

Accountancy bodies have been lobbying the government to take the decision of the judges in this and the recent case involving Lorraine Kelly into consideration when they update the CEST software.

If you have any questions about anything raised in this blog give us a call on 01332 292022. Or drop us an e-mail to