HMRC has published their view of mutuality of obligations to explain their position behind omitting it from their Check Employment Status for Tax (CEST) online tool.  They steadfastly believe that mutuality of obligations is present for any circumstance where someone might be using their CEST online tool.  Their rationale is that work has been agreed in exchange for pay, and therefore that a mutuality of obligation exists.  However, this position ignores the judiciary as IR35 case law has often hinged on whether a mutuality of obligation is present or not.

Commenting on HMRC’s position paper, Julia Kermode, Chief Executive of FCSA said: “I am concerned that publishing HMRC’s position on Mutuality of Obligations on the IR35 Forum website may give the impression that the stakeholders (i.e. non-HMRC representatives) on the IR35 Forum endorse their position, but I very much doubt that many of us do.  FCSA responded to HMRC’s draft MOO paper very clearly stating that we do not agree with their view, and that we believe MOO is a serious omission from their CEST tool.  Quite simply MOO is an essential element of IR35 status, as borne out in recent cases, and until HMRC’s position is revised their CEST tool is fundamentally flawed by ignoring case law.  Any roll out of IR35 reform to the private sector is unthinkable until this is resolved.”

You can view HMRC’s MOO position paper here – HMRC_paper_on_Mutuality_of_Obligation  

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