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IR35 – HMRC releases updated Check Employment Status for Tax (CEST) tool

HMRC released the updated version of their Check Employment Status for Tax (CEST) tool yesterday. The CEST tool asks a series of questions to make an assessment of whether a particular engagement is one of employment or of self-employment.

This is not just relevant for situations where off-payroll workers are engaged directly by a client, but also because making an assessment of employment status is a fundamental part of applying the new IR35 rules from April 2020. The new IR35 legislation requires the end client using the labour of a worker to take “reasonable care” in making their employment status determinations. Many businesses will be using CEST as a key part of their approach.As with the previous version of CEST, HMRC state that they “will stand by the result you get from this tool”, unless “the information you have provided was checked and found to be inaccurate” or in the case of “contrived arrangements, designed to get a particular outcome from the service.”