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Legal Updates

IR35 – Government’s CEST tool produces undetermined outcome

17 December 2020 #Employment

The Government’s CEST tool, designed to help determine whether a worker will be caught by the changes to the off payroll working rules (IR35) was unable to reach a conclusion in 19% of cases checked in the last year.

In data released by HMRC, between 25 November 2019 and 24 November 2020 the CEST tool delivered 975,416 outcomes. Of these outcomes:

  • 505,598 (52%) found the worker fell outside the IR35 rules;
  • 281,099 (29%) found the worker would be inside IR35; and
  • 188,719 (19%) were undetermined.

HMRC note in its comments alongside the data that in ’more finely balanced cases’, the tool will produce an ‘undetermined’ outcome and advises users to refer to their detailed IR35 guidance to make their decision on whether a worker falls within IR35.

Responsibility for making these status determinations is due to shift from the worker to the ‘end user’ client on 6 April 2021, but specialists such as Qdos have voiced concerns that the tool still is not ‘up to scratch’ following its update in November 2019 and will leave users without the clarity they need to make these decisions.

There are currently no plans to update the CEST tool further, as HMRC believe adding in the more complex questions needed to reach an outcome in more cases would make ‘increase the burden’ for most people using the tool. They will however publish this data on a quarterly basis going forward, in a bid to improve user confidence in the tool.

Should you have any queries about IR35, including about status determinations, our employment team is on hand to help.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

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Ciara Duggan

Ciara Duggan
Trainee Solicitor

T: 020 7539 8052
M: 0778 665 5903


Employment team
+44 (0)118 958 5321