The short version: CEST stands for Check Employment Status for Tax. It’s HMRC’s online tool that helps you figure out whether you fall inside or outside IR35 rules.
How does it work?
You answer a series of multiple choice questions about how you work. Things like whether your client controls your work, whether you could send a substitute, how you get paid, and whether you receive employee style benefits.
The tool is anonymous, so HMRC won’t store your answers. You can use it whether you’re a contractor, an agency, or someone hiring contractors.
What’s IR35?
IR35 is a set of rules designed to catch disguised employees. People who work like employees but get paid as contractors. If you’re inside IR35, you pay roughly the same tax as an employee would.
Is CEST reliable?
It’s been criticised for oversimplifying things. It doesn’t cover every aspect of employment status and sometimes returns inconclusive results. Many contractors and advisers use it as a starting point rather than the final word.
Worried about your IR35 status? Talk to us before making any decisions.
