Why you should use anything but CEST

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Martin Baxter
23 Jul 2021 @ 09:07 am
in category: IR35 Hub

Last month, it was revealed that over 210,000 users of the CEST tool received an indeterminate result, according to statistics released by GOV.UK. The data, which looked at CEST usage from 25th November 2019 to 31st May 2021, showed that from more than 1 million users of the CEST tool, a staggering 21% were left without a clear-cut result. 

This data also revealed that the party using CEST most frequently was the hirer, with this making up 58% of users. So if you’ve been using the CEST tool to assess multiple contractors’ IR35 statuses, then the chances are that you may have already been hit with an indeterminate result. But, do you have the time to account for a possible 1 in 5 of your CEST uses being essentially null and void? And what other options are there?  

The good news is there are a variety of IR35 Status Tools on the market, that work differently to CEST. Read on for the options available to recruiters and clients, and how they work in practice.  

The problems with CEST 

The biggest problem with CEST is that in the event of an indeterminate result, the user is left in limbo. The only option available is to call HMRC to discuss, something that you probably don’t have time for. Even if you do speak to someone, there is no guarantee this will aid in your assessment, as they will be on the same page as the CEST assessment.  

The issue with CEST tool doesn’t stop there, other problems include:  

- The tool is arguably too simple, as it doesn’t go into enough detail to build a full picture of every contractor engagement. 

- It takes little regard for one of the key main status tests from caselaw, Mutuality of Obligation (MOO). Several high profile cases have been lost by HMRC as the judge ruled that MOO did not exist.

- When the tool was launched, HMRC did not take feedback into account, so it was not properly tested by recruiters, clients or contractors.  

Other automated IR35 status tools  

CEST is one example of an automated IR35 status determination tool, but there are others available on the market. These are typically completed online with a series of yes or no questions.  

Pros: As they are automated, they don’t require any intervention by a human. This means a review will usually be cheaper than a manual review, and they will often offer a fast, or even instant, result. If you complete lots of IR35 reviews for contractors, then this could be a quick way to churn through them.  

Cons: The main problem with a fully automated tool is they could run into the same issue as CEST and may get stuck in the event of an indeterminate result.  

How manual IR35 status tools work  

The opposite of automated tools - fully manual tools are completed by a person in the form of a manual review of the engagement.  

Pros: As this method allows a conversation as opposing to ticking boxes, it allows for a more in-depth overview of the engagement, thus reducing the chances of the result being indeterminate. Once the review has been completed, you may get a full report, outlining the details of the result and the engagement.  

Cons: As a manual review takes longer and requires human contact, they are usually more expensive than automated tools. You also would have to wait for the result, which would depend on the current demand for the tool. You would also have to consider whether you have the time to complete a manual review every time you take on a new contractor or engagement. If the contract is fairly straightforward, it may be a waste of your time and money to opt for a manual review for every single engagement.  

A hybrid IR35 tool  

If CEST, other automated or manual tools don’t sound like the right fit for your company, there is one other option. A hybrid tool combines the best of automated and manual tools; an automated result, with manual intervention for indeterminate results. This will save you the time and money of having to use a fully manual tool for every engagement, but will also mean you won’t waste time on any engagements that get stuck at the indeterminate stage.  

The Kingsbridge IR35 Status Tool  

Are you interested in using a hybrid solution? One option you could look at is the award-winning Kingsbridge Status Tool. Developed by our Head of Tax, Andy Vessey, who has successfully defended over 500 cases, the tool has been designed to offer recruiters, clients and contractors alike a comprehensive IR35 status tool. The carefully worded questions can be easily completed online, and in the event of an indeterminate result, the case will be passed to our in-house IR35 team for manual review.  

The tool can also work in partnership with IR35 and Recruiter Protect insurance, to help mitigate any risk to you in the event of an IR35 enquiry. To find out more about how the IR35 Status Tool could work for you, or to book a demo of the tool, click here or email IR35@kingsbridge.co.uk.  


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