HMRC updates employment status test tool

The UK tax authority has released CEST 2.0, the latest iteration of its controversial IR35 status determination tool, with a new platform and more features to come in its next round of updates.

HMRC has confirmed that its Check Employment Status for Tax (CEST) tool moved onto a new platform on Monday.

The in-house platform known as Ocelot forms part of the tool’s upgrade to CEST 2.0. According to HMRC, the Ocelot platform is more flexible and will allow the tax authority to amend the tool more efficiently if required. It will also allow HMRC to analyse data and “customer journeys”, from the tool to “continuously improve the customer experience”.

In phase one of the CEST 2.0 update, there are three main differences to the tool.

  1. The user can now review their answers after each section rather than at the end of the process. According to HMRC, this will help CEST users reflect on their answers, access guidance at earlier stages and reduce the risk of receiving an “unable to determine” outcome.
  2. The Employment Status Manual guidance has been embedded into the tool itself. This removes the need for the user to visit web pages outside the tool and reduces the risk of the user being timed out of the process. HMRC also states that this change guarantees the customer is directed to the correct guidance for a particular question.
  3. To help the user understand why they have received a particular CEST determination, the tool will tell them the conclusion it has reached from the answers they have provided for each question or section.

During phase one of the CEST update, the questions asked will remain the same as the previous iteration, as will the tool’s logic and the Employment Status Manual.