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IR35: HMRC restores Github access to deleted CEST source code, but confirms update data lost

April 14, 2024
in Technology
IR35: HMRC restores Github access to deleted CEST source code, but confirms update data lost
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After the source code for its much-maligned online IR35 status checker tool was deleted in error from Github, HMRC confirms it has now been re-uploaded, but any data about past updates to the tool have been lost


Caroline Donnelly

By

Caroline Donnelly,
Senior Editor, UK

Published: 11 Apr 2024 10:45

HM Revenue & Customs (HMRC) has confirmed the Github repository housing the source code for its online IR35 employment status checker tool has been restored, after it was deleted “in error” during a platform migration.

The government tax collection agency recently completed the process of migrating its Check Employment Status for Tax (CEST) tool to a new in-house developed platform known as Ocelot.

During the process of decommissioning the legacy platform hosting CEST, the source code for the decision engine underpinning the tool was removed from Github, along with the repositories containing the code for the tool’s front end.

Computer Weekly sources first noticed the disappearance of the repositories on Friday 5 April, which caused some to raise red flags because its removal is at direct odds with the contents of the Cabinet Office’s service manual.

This document guides public sector IT teams on how to build “great” public services, and states they should make any code used to create digital services publicly available in open source code repositories, such as Github, unless there is good reason not to do so.

HMRC further confirmed to Computer Weekly that while access to the source code itself has been reinstated, details of any historical changes and updates made to the code since it was first uploaded to Github have been lost.

This means details of any changes made to the code in anticipation of significant developments, such as the IR35 reforms being rolled out to the private sector in April 2021, are now no longer viewable.

In a statement to Computer Weekly, HMRC played down the loss of data by reiterating the code that underpins the decision engine part of CEST has not been updated for more than five years, as confirmed by the contents of a recent Freedom of Information (FOI) request.  

“Any other changes that were previously recorded related to general maintenance of the tool, not changes to how the tool makes status determinations,” a departmental spokesperson stated.

Seb Maley, CEO of IR35 compliance company Qdos, told Computer Weekly that the situation is another reason why public and private sector organisations should be wary of relying on CEST to determine the IR35 status of their contractors.

“You couldn’t make it up. In some ways, the fact that HMRC has made so few changes to CEST since its introduction might at least mean there’s not a lot of data to lose. But that’s a bigger problem in itself,” he said.

“CEST has been plagued with issues from day one and this latest calamity is yet another reason not to trust it to determine the IR35 status of contractors – nor the employment status of sole traders for that matter.

“My advice to any contractor who has had their IR35 status determined by an answer provided by CEST is to have it reassessed elsewhere. Businesses meanwhile should avoid it all costs – it continues to pose a risk to compliance, rather than ensuring it.”

HMRC has previously also played down the significance of the underlying decision engine for CEST not being updated for so long, despite the department’s head telling the Public Accounts Committee (PAC) in March 2019 that updating the tool would be a “continuous” and “unending” process.

My advice to any contractor who has had their IR35 status determined by an answer provided by CEST is to have it reassessed elsewhere

Seb Maley, Qdos

At the time, PAC was told by HMRC head Jim Harra that CEST would be regularly updated to reflect changes in case law, as a result of IR35 tribunal cases and court decisions on employment status emerging.

There have been at least 20 IR35 tax tribunal hearing decisions made since the last time CEST was updated in October 2019, including a Court of Appeal hearing involving TV personality Kaye Adams in April 2022 that concluded HMRC’s view of employment status is incorrect.

Adams, who provided services on a freelance basis to broadcasters including the BBC through her limited company Atholl House Productions, successfully won an appeal against HMRC who claimed she owed £124,000 in unpaid tax on mis-classified inside IR35 engagements she participated in between March 2015 and April 2017.

According to a publicly available document published by HMRC, CEST “was rigorously tested during development in conjunction with HMRC’s lawyers against live and settled cases and reflects employment case law”.

The document goes on to state the organisation has been “committed to continuous testing of CEST against emerging employment status case law”, before going on to list the outcome of a series of First-Tier Tribunal decisions that CEST has been tested against.

Among them is the Atholl House case, which the document cites as an example of where CEST’s results (that state IR35 applies) align with the findings of the First-Tier Tribunal, even though the Court of Appeal later ruled that Adams’ engagements were outside IR35.

Dave Chaplin, CEO of contractor compliance company IR35 Shield, is one of a number of contracting market stakeholders that has called into question HMRC’s claim that CEST does not need to be updated because its testing of the tool show its outcomes still align with case law.

“Version 2.4 of the CEST logic tables were designed five years ago to align with the HMRC view of status, and HMRC have claimed that none of the case law in the past five years has challenged that view,” said Chaplin.

“That stance does not align with the representations made by HMRC to the Court of Appeal in the Atholl House case and the decision published on 22 April 2022.” 

Read more on IT consultancy


IR35: HMRC rushing to restore CEST source code deleted from Github ‘in error’

CarolineDonnelly

By: Caroline Donnelly


HMRC’s online IR35 status checker tool CEST not updated in five years, FOI confirms

CarolineDonnelly

By: Caroline Donnelly


IR35: HMRC completes first phase of CEST upgrades with Ocelot platform migration

CarolineDonnelly

By: Caroline Donnelly


Spring Budget 2023: Campaign calls on government to ‘fix or ditch’ IR35

CarolineDonnelly

By: Caroline Donnelly

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Computer Weekly – https://www.computerweekly.com/news/366580533/IR35-HMRC-restores-online-access-to-deleted-CEST-source-code-but-confirms-update-data-lost

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