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HMRC is facing serious questions about the online CEST tool that it created to enable contractors to ascertain their IR35 status, as new data shows that it is failing huge numbers of people.

These are internal HMRC figures, and they reveal that hundreds of thousands of contract workers affected by the IR35 changes have been unable to establish their tax status using the CEST checker. This is despite reforms to the IR35 rules having been made law months ago, with the data going all the way back to November of 2019.

CEST is supposed to enable organisations that employ contract workers to find out whether they fall inside or outside of IR35 using a set of questions concerning their hours and patterns of working. However, HMRC’s own figures reveal that it has failed to clarify this in over 210,000 cases during the past 18 months.

The limitations of this tool are one of the reasons why some employers will turn to accountants in Goole or anywhere else that are experts in the IR35 regulations.

Indeed, the CEST checker has been criticised as inadequate on numerous occasions since it was introduced by HMRC, and Seb Maley from Qdos told Computer Weekly that:

“Here we have proof that CEST has left hundreds of thousands of contractors and businesses in limbo, unsure of whether a contract belongs inside or outside of IR35.”

Maley added that it should prove to be the last straw for the tool, as it was clearly not fit for its purpose.

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