Definition of CEST
CEST is short for Check Employment Status for Tax. It’s a digital tool designed by HMRC to help public authorities decide if a worker falls inside or outside the scope of IR35.
The tool comes in a quiz-like format and can be accessed here.
Why was CEST introduced?
When off-payroll working rules were introduced to the public sector in 2017, the onus to certify whether a worker fell inside or outside IR35 shifted from the worker to the public sector authority.
HMRC produced the CEST tool to help public sector authorities make these decisions quickly and cheaply.
An updated version of the CEST tool was released in November 2019.
Does CEST only apply to the public sector?
CEST can be used in both the private sector and the public sector but it’s important to note that the private sector is assessed differently under the off-payroll regulations. In the private sector, the onus is on contractors to declare whether they fall inside or outside IR35, rather than their clients.
From April 2021, the rules on off-payroll working in the private sector are set to change, bringing it in line with the rules that apply to the public sector for contractors working with large and medium-sized business clients.