CEST is an online tool HMRC have created to help companies establish whether or not a particular contract falls within IR35.
CEST – or Check Employment Status for Tax – is a simple tool designed to make IR35 assessments quick and simple for companies who find themselves responsible for providing an SDS to their contractors.
Whilst it is both simple and quick to use, it has been criticised as being flawed and skewed towards capturing contractor’s within IR35. In response to this criticism, HMRC recently released an updated version of CEST with a number of tweaked questions.
Even with these changes, we are under the impression that it’s an unreliable IR35 support tool – primarily because it doesn’t fully take into account mutuality of obligation, one of the key IR35 indicators. The amended questions are still not sophisticated enough to produce a reliable opinion, based on the individual’s working arrangements. For this reason we recommend that contractor’s treat the CEST tool with caution and undertake independent IR35 reviews instead, wherever possible.