HM Revenue and Customs (HMRC) has actually lastly shared upgraded use information for its much-maligned online IR35 status checker tool through a Freedom of Information (FOI) action, following a 16-month push for the federal government firm to launch it.
The figures, acquired through FOI by ContractorCalculator CEO Dave Chaplin, reveal that usage of the tool has actually stopped by 73% considering that the 2021-2022 fiscal year, with a significant and severe decrease in users throughout the previous 12 months.
The Check Employment Status for Tax (CEST) tool, as it’s understood, is meant to assist public and economic sector organisations separately examine the IR35 status of each and every single specialist they engage.
It does this by providing users a numerous choice-style test about the working plans of the specific professional, before processing the actions to return an outcome of within IR35, outside IR35 or undetermined.
The very first model of the tool was controversially presented simply one month before a reform of how the IR35 guidelines operate in the general public sector entered into force in April 2017, and was roundly criticised from launch for being error-prone and unsuited for function
In November 2019, HMRC launched a revamped variation of CEST in preparation for extending the IR35 reforms to the economic sector in April 2020.
The beginning of the Covid-19 coronavirus pandemic triggered the federal government to postpone the economic sector roll-out of the IR35 reforms till April 2021.
Economic sector reforms
Throughout the 2020-2021 fiscal year, CEST returned an overall of 703,620 outcomes in general, increasing to a peak of 806,432 results the following fiscal year– when the economic sector reforms entered force, the HMRC figures reveal.
Reserving the outcomes that did not include professionals providing their services by means of a minimal business or intermediary, CEST was utilized 458,413 times throughout the 2020-2021 fiscal year, with 50% of users being categorized as outdoors IR35, 31% as within IR35 and 19% returning an undetermined outcome.
Throughout the “peak” year of 2021-2022, 512,025 specialists working through an intermediary utilized CEST, with 55% figured out to be working outside IR35, 25% categorized as being within IR35 and the staying 20% undetermined.
By the 2023-2024 fiscal year, CEST use amongst this group of professionals dropped to 138,758, which is 73% lower than the peak use. The number being categorized as outdoors IR35 had actually increased to 64%, while the number signed up as within IR35 had actually dropped to 17%– and 19% stayed undetermined.
“This information validates what lots of in the contracting sector have actually long thought: self-confidence and usage of HMRC’s CEST tool have actually fallen,” stated Chaplin. “Whilst market elements play their part, we’ve seen no proof of a collapse in professional need that would describe a 73% drop in use. What’s most likely, and what we are seeing on the ground, is that business are more notified about IR35 and the defects in HMRC’s tool and are not utilizing it due to the fact that it does not provide the certainty they require.”
HMRC’s take
HMRC, on the other hand, has a somewhat various take on why use of CEST has actually remained in decrease because its “peak” year of 2021-2022.
“We constantly anticipated usage of the tool to lower as companies acquainted themselves with the 2021 off-payroll working reforms and most of those who utilize the tool are pleased with the service they get,” a representative for HMRC informed Computer Weekly.
What that declaration does not represent is why use of CEST by PSC specialists has, on a year-on-year basis, stopped by half (48%) in between the 2023-2024 and 2024-2025 fiscal year, stated Chaplin.
“Usage has actually dropped off by a half in the last year-on-year procedure– several years after the familiarisation with the reforms occurred,” he stated. “So [HMRC] declaring those left utilizing the tool are pleased is a primary analytical error called survivorship predisposition– misinterpreting a noticeable subgroup as agent of the whole group.
“A reputable complete satisfaction procedure ought to appraise the other half of individuals who selected to desert utilizing the tool.”
Going into the drops in use
In the FOI reaction, the figures for the 2023-2024 year are divided into 2 six-monthly durations, with an advisory note that the April 2023 to October 2023 information was taped before HMRC finished the migration of CEST to its Ocelot platform
As reported by Computer Weekly at the time, Ocelot is an internal industrialized platform that is billed by HMRC as “allowing the fast production of interactive assistance” to make tools like CEST much easier for users to browse.
The October 2023 to March 2024 information is likewise flagged as being taped once the Ocelot migration had actually been finished.
Computer system Weekly queried the drop in use considering that CEST was moved to the Ocelot platform with HMRC, however the representative did not straight respond to the concern.
Hold-ups and interruptions
Following the November 2019 release of the upgraded CEST tool, HMRC supplied month-by-month use information about the tool on a Gov.uk website, however that dropped in September 2021.
Anybody desiring sight of those figures after that date might ask HMRC for them by means of the FOI plan, which is a strategy ContractorCalculator’s Chaplin has actually formerly followed.
In action, Chaplin was sent out an information dump by HMRC in March 2023 which contained use figures for the tool covering the duration as much as January 2023 in reaction to among his FOI demands.
In February 2024, Chaplin made a follow-up ask for the most current set of use figures for the tool, however this was declined, as verified by files seen by Computer Weekly. The factor offered was that HMRC would be making the information openly readily available within 6 months.
When the asked for information stopped working to materialise because timeframe, Chaplin returned in touch with HMRC, which reacted the following month to state the hold-up was down to the beginning of the July 2024 basic election.
“It appears the previous FOI factor for keeping the information (due to the fact that they currently prepared to release it) fell away, and there was never ever any strategy to release it, otherwise they might have kept them once again utilizing the exact same factor,” stated Chaplin.
On 25 April 2025, HMRC had actually still not launched the asked for figures, triggering another FOI demand from Chaplin. On Tuesday 5 June 2025, the firm lastly sent out through the use figures, covering the 2020-2021 fiscal year to April 2025, with an apology for the hold-up in passing them along.
The reasons that the information has actually taken so long to materialise is anybody’s guess, and it is likewise curious that– regardless of stating the information would be shared openly– the CEST use tracker website has actually still not been upgraded given that September 2021.
Speaking With Computer Weekly, Seb Maley, CEO of professional insurer Qdos, stated that provided HMRC keeps it will constantly wait the outcomes CEST returns, the reality use information is not openly offered is untenable.
And now that information has actually been shared, it highlights the detach in between HMRC’s viewpoint on how excellent a task CEST does and how it carries out in reality.
“HMRC has actually preserved the rhetoric that CEST depends on the task,” he stated. “This is in spite of it still not lining up totally with case law and being not able to figure out status around one in 5 times and [its results] even being neglected in tribunals
“The truth is that CEST positions a threat to anybody who depends on it exclusively to figure out IR35 or work status– no matter whether the tool classes a specialist inside or outside IR35,” stated Maley.
“This tool will have a choosing say over just how much tax lots of countless specialists pay, which is among the factors having a view over how it’s utilized and the outcomes is so essential.”
