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Problems with HMRC's 'CEST' Tool

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There has been much debate between HMRC and practitioners around the accuracy of the decisions from the CEST tool, especially during the roll-out for the Public Sector.

The CEST tool has been heavily criticised by a number of industry professionals, including the BBC and KPMG Experts’ concerns have been vindicated by recent tribunal rulings.

Challenges identified with the tool are that it heavily relies on the responses provided around the right of substitution, specifically, where it is marked as being enforceable and genuine. The tool does not probe further and the answers can lead to an incorrect determination.

Aside from the invention of legislation itself, nothing relating to IR35 has proved to be as controversial as the operation of the CEST tool. Critics claim that CEST excludes certain key status indicators, whilst being overly-reliant on others. How can a digital tool draw a picture of an individual’s working conditions, whilst also taking into account only certain elements of a written contract?

In recent announcements HMRC have stated “they will work with stakeholders to improve the CEST digital service. Enhancements to CEST will be introduced in advance of the new rules coming into force.”

Next steps

  • Clients should start to assess whether they will be affected or exempt from the off-payroll rules
  • Seek advice from your company accountant and legal department
  • Assess who amongst their contractor population may be affected by this change
  • Identify who within your organisation could make the status decisions and ensure that those individuals understand how to asses status
  • Talk to Redline about an insurance backed solution via Zurich


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Redline offer knowledge-led, tailor-made recruitment programmes to suit clients’ specific needs. We adopt a ‘partnership’ approach to ensure a detailed understanding of clients’ objectives and requirements. For more information regarding how we can help your business, please contact Peter Livingstone, Director of Contracts & Interim on 01582 878852 or email