How can we help?


IR35 – Government’s CEST tool produces undetermined outcome

The Government’s CEST tool, designed to help determine whether a worker will be caught by the changes to the off payroll working rules (IR35) was unable to reach a conclusion in 19% of cases checked in the last year.

In data released by HMRC, between 25 November 2019 and 24 November 2020 the CEST tool delivered 975,416 outcomes. Of these outcomes:

  • 505,598 (52%) found the worker fell outside the IR35 rules;
  • 281,099 (29%) found the worker would be inside IR35; and
  • 188,719 (19%) were undetermined.

HMRC note in its comments alongside the data that in ’more finely balanced cases’, the tool will produce an ‘undetermined’ outcome and advises users to refer to their detailed IR35 guidance to make their decision on whether a worker falls within IR35.

281,099 (29%) found the worker would be inside IR35

Responsibility for making these status determinations is due to shift from the worker to the ‘end user’ client on 6 April 2021, but specialists such as Qdos have voiced concerns that the tool still is not ‘up to scratch’ following its update in November 2019 and will leave users without the clarity they need to make these decisions.

There are currently no plans to update the CEST tool further, as HMRC believe adding in the more complex questions needed to reach an outcome in more cases would make ‘increase the burden’ for most people using the tool. They will however publish this data on a quarterly basis going forward, in a bid to improve user confidence in the tool.

Should you have any queries about IR35, including about status determinations, our employment team is on hand to help.

About this article

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

About this article

Read, listen and watch our latest insights

  • 22 September 2023
  • Employment

Talking Employment Law: New family friendly rights

In this first podcast in the ‘Talking Employment Law’ series, Lucy Densham Brown and Rebecca Dowle, members of the employment team summarise some of the big new family-friendly Bills that are working their way through parliament.

  • 20 September 2023
  • Commercial Real Estate

Commercial buyers beware of residential Stamp Duty Land Tax

This article discusses a recent case in which a property buyer calculated the Stamp Duty Land Tax due on the purchase at a lower rate, due to the mixed-use purpose of the property.

  • 19 September 2023
  • Privacy and Data Protection

Organisations’ use of social media: Data protection

Social media applications (or commonly known as ‘apps’) are being developed all the time and we are constantly being introduced to new social media platforms, some of which take almost no time to gain huge popularity.

  • 14 September 2023
  • Immigration

Entrepreneurial Dreams: What is the Innovator Founder Visa?

In an era defined by innovation and entrepreneurship, the United Kingdom has made a substantial effort towards fostering its reputation as a global hub for start-ups and innovators. The introduction of the UK’s ‘Innovator Founder’ route has marked a pivotal moment in the country’s immigration policy.

  • 11 September 2023
  • Corporate and M&A

Changes to the tax treatment of Employee Ownership Trusts

The government published a consultation on 18 July 2023 seeking the public’s views on its proposals to reform the tax treatment of Employee Ownership Trusts and Employee Benefit Trusts. Parties are invited to express their opinions via email via the government website until the consultation closes on 25 September 2023.

  • 08 September 2023
  • Immigration

Navigating the Latest Immigration Rules for Overstayers in the UK: A Comprehensive Guide for 2023

Staying beyond the expiration of your UK visa is a serious matter that, in most cases, can result in significant and long-lasting repercussions.