The Check Employment Status for Tax (CEST) tool provides HMRC’s perspective on a worker’s employment status, utilising the information supplied. It also serves to assess whether modifications to contractual terms or working arrangements could impact the worker’s employment status. CEST, introduced in 2017, assists in status determinations related to IR35 but lacks legal authority and is not compulsory. Controversies surround its accuracy and alignment with current case law. Concerns have been raised about misuses, with instances of government bodies facing fines for incorrect assessments, relying solely on CEST.
HMRC, has recently launched CEST 2.0, the latest version of its controversial IR35 status determination tool. The update, effective from October 2nd, involves a shift to a new platform called Ocelot, enhancing flexibility and efficiency. In phase one, changes include the ability for users to review answers after each section, integration of Employment Status Manual guidance, and clearer explanations of CEST determinations.
Notably, additional data on CEST outputs and usage reveals an increase from 20% to 23% in undetermined results. This, coupled with a 3% decline in contractors using CEST, raises concerns. While the recent changes are a positive step, caution is advised for those considering CEST. Detailed scrutiny remains crucial, and until the full version is released, confidence in CEST 2.0 for accurate IR35 and status assessments is uncertain.
In summary, CEST 2.0 brings improvements, yet concerns persist over its reliability and alignment with legal standards.