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CEST asks ‘Will the worker have to fund any vehicle costs before your organisation pays them?� or ‘Will you have to fund any vehicle costs before your client pays you?�

If a worker must acquire a vehicle specifically for providing services, this could be bought, leased or through loans, then this would fall with the ‘Yes� category for CEST.

If a worker incurs significant extra cost for using the vehicle specifically to perform the duties of the contract, this would fall within the ‘Yes� category for CEST. This could be running costs for example. For insurance to count as an extra cost, a worker would need to purchase a materially more expensive policy that was significant in comparison to their income and was required to perform the duties of the contract.

If a worker already owned a car, gets another out of preference, is given money for it by the hirer or simply commutes to work, then this is the ‘No� category for CEST.

EXAMPLE

Dave is a travelling salesman for a security company. He drives to each customer.

• If the company requires Dave to drive and requires Dave to buy a particular car to maintain company image which he uses his own money for without company contributions, this would be financial risk.
• If Dave uses his own personal car and the company gives Dave money for mileage and running costs, this is not financial risk.
• If Dave is not required to buy additional insurance and can drive on the policy he already had personally, then the cost of the insurance is not financial risk.
• If Dave drives to the company offices in his personal car and then uses a company car to travel to customers, this is not financial risk. This is ordinary commuting and not business travel.
• If Dave has a personal car he could use but chooses to buy another car for this task, the cost of the new car is not financial risk. Dave was not required to buy a new car and did so out of choice, so it is not fundamental to the task.