FOI release

Check Employment Status for Tax (CEST) usage data

Updated 23 September 2021

1. Background

How a worker is taxed will depend on what their employment status is for tax and National Insurance contributions (NICs) purposes. Employment status for tax and NICs is established by key criteria determined by the courts.

HMRC introduced the CEST service in 2017 to help employers (or hirers) and workers to determine how the work being done should be dealt with for tax purposes.

In November 2019 HMRC launched an enhanced version of the tool, after working with more than 300 stakeholders to make the tool clearer, reduce user error and to enable the tool to consider more detailed information.

This publication provides details of CEST usage following the launch of the enhanced version.

2. CEST Users

CEST can be used by anyone who needs to understand employment status for tax and NIC purposes.

This could include:

The organisation hiring a worker

Anyone considering directly hiring workers can use CEST to determine the employment status of those workers for tax and NIC purposes.

If workers are engaged through intermediaries (typically a limited company, often known as a personal service company), the hiring organisation may be responsible for deciding the correct employment status of a worker’s contract.

If the hirer knows, or has already engaged, the worker, CEST will ask more questions. This is because the hirer will be able to get more information about the worker’s own business.

If the hirer does not know who the worker is then additional questions will not be asked. The hirer will still get a determination that HMRC will stand by. HMRC recommends that once the worker’s identity is known, the hirer can use CEST again to get a final determination that incorporates the worker specific factors.

A hirer can also use CEST when considering a disagreement raised by a worker or agency to decide whether to maintain a determination as part of the [client-led status disagreement process] (https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm10015).

A worker providing their services

Public sector engagers, and medium and large sized client organisation in the private sector, are responsible for determining whether workers they engage fall within the off-payroll working rules. However, the worker may want to use CEST to find out their employment status for tax and NICs. This should be done for each engagement they have. Workers may also want to use CEST to check the determination reached by a hiring organisation. Some CEST questions are specific to the individual’s own working arrangements. Workers may therefore have additional information they can provide to the hirer to ensure a more accurate status determination is reached. The worker may also want to use CEST to check their employment status as part of the client-led status disagreement process for engagements affected by the off-payroll working rules.

An agency placing a worker operating through an intermediary

The agency which places a worker with the hirer may have a direct contract with the hirer. Where that agency places a worker with a hirer in the public sector, or a medium or large-sized client outside the public sector, the hirer will inform them whether off-payroll working rules apply to that contract, and therefore the worker.

It is possible that the agency will know more about the individual circumstances of a worker than the hirer. The agency can use CEST to check the status determination reached by the hirer is accurate based upon its own understanding of the contract and the circumstances of the worker being supplied to the hirer.

If the “agency” option is selected, the tool will take the user through the same questions as it does for the worker. Regardless of the route taken, the CEST output provides next steps and information relevant to the specific user type selected. The route taken by users does not determine the questions a user is asked, nor impact the tool’s output, just who the questions are directed to.

CEST Data – User Journeys

To ensure user confidence in CEST, HMRC does not collect any identifying details of the worker whose status is being tested, nor the user (client/agency/worker) completing the tool. HMRC does collect counts of the final determinations issued by CEST.

In December 2020 and for the coming year, HMRC made a commitment to publish on a quarterly basis data around usage of CEST. This release honours that commitment and is intended to strengthen user confidence in the determinations given by the service.

Our digital services have supported 1,837,488 CEST uses in the period 25 November 2019 to 31 August 2021. This represents the 88% of users who have accessed the tool and go on to complete the journey. A breakdown by user is provided below:

User Worker Hirer Agency Total
Uses 713,197 1,092,979 31,312 1,837,488

*The figures above exclude 0.04% of ‘Not Matched’ cases where the user did not provide all the information required for CEST to provide an output.

Pie chart showing the distribution of CEST users: Agency - 2%, Hirer - 59%, Worker 39%

3. CEST Outcomes

The CEST tool helps you determine a worker’s employment status for tax and National Insurance contributions (NICs) purposes.

It gives you HMRC’s view of a worker’s employment status for tax and NICs based on the information you have provided. It can also be used to check if changes to the contractual terms or working practices alter the employment status for tax and NICs.

In most cases, the CEST tool will determine the worker’s employment status for tax and NICs purposes. HMRC will stand by the result produced by the tool, provided the information entered is accurate, and remains accurate, and the tool is used in accordance with our guidance. The tool will only arrive at a determination when it is certain based upon the facts provided. To reach a view in more cases HMRC would need to add in more complex questions, which would increase the burden of using the tool for the majority of users. In the minority of more finely balanced cases, CEST is expected to produce an undetermined outcome and the detailed guidance and dedicated support, including CEST specific guidance at ESM11000 and guidance to aide status decision making at ESM0500 should help users form a judgement. The Employment Status Manual CEST guidance has been accessed on 215,826 occasions from the CEST landing page in the period 25 November 2019 to 31 August 2021.

CEST Data - Outcomes

CEST provides three outcomes for users

  • Outside off-payroll working rules or self-employed for tax purposes
  • Inside off-payroll working rules or employed for tax purposes
  • Undetermined

As with our last update in June 2021, we have separately itemised those user journeys that have identified the worker as using an intermediary (commonly known as off-payroll working or IR35) and direct engagements and have presented these accordingly under ‘CEST Data – Outcomes’.

In the period between 25 November 2019 and 31 August 2021 the split between the outcomes was as follows:

Worker Using an Intermediary Outside off-payroll working rules (IR35) Inside off-payroll working rules (IR35) Undetermined Total
Total 558,346 333,431 233,631 1,125,408
Pie chart showing the breakdown of employment status for those workers using an intermediary: outside off-payroll rules - 49%, inside off-payroll rules – 30%, undetermined - 21%
Worker NOT Using an Intermediary Self-Employed for tax purposes Employed for tax purposes Undetermined Total
Total 392,706 176,452 142,922 712,080
Pie chart showing the breakdown of employment status for those workers not using an intermediary: self-employed - 55%, employed - 25%, undetermined - 20%

4. Detailed usage data

The following charts show the CEST outcome data by user group since 25th November 2019.

Overall

Outcome Outside off-payroll working rules (IR35) Self-employed for tax purposes Inside off-payroll working rules (IR35) employed for tax purposes Undetermined (Worker using an intermediary) Undetermined (Worker NOT using an intermediary) Total
Nov-19 11,531 4,632 10,629 2,616 4,774 2,192 36,374
Dec-19 23,060 11,095 17,277 6,462 9,767 5,396 73,057
Jan-20 51,533 21,808 39,910 14,519 23,441 10,340 161,551
Feb-20 81,320 32,973 52,074 18,971 34,571 13,839 233,748
Mar-20 57,059 86,647 33,793 16,395 24,054 11,229 229,177
Apr-20 5,018 23,770 2,818 3,825 1,950 2,784 40,165
May-20 4,353 5,711 2,522 3,711 1,810 2,756 20,863
Jun-20 5,276 6,738 3,172 4,075 2,263 3,361 24,885
Jul-20 6,058 7,305 3,464 4,261 2,596 3,510 27,194
Aug-20 5,335 6,185 3,629 4,283 2,404 3,160 24,996
Sep-20 6,730 8,019 4,545 5,325 2,950 4,052 31,621
Oct-20 8,197 9,019 5,883 5,689 3,483 4,425 36,696
Nov-20 10,183 9,660 7,842 5,740 4,396 4,885 42,706
Dec-20 9,995 14,510 7,517 4,810 4,467 3,852 45,151
Jan-21 18,942 11,991 13,724 7,328 8,126 5,573 65,684
Feb-21 39,487 18,886 25,387 10,600 16,529 8,475 119,364
Mar-21 87,158 33,603 44,370 18,384 34,848 14,770 233,133
Apr-21 43,385 23,595 18,530 12,318 17,311 10,491 125,630
May-21 25,135 17,721 10,846 8,415 10,260 8,526 80,903
Jun-21 21,692 15,625 9,267 6,824 8,846 7,318 69,572
Jul-21 20,282 12,982 8,542 6,319 7,900 6,695 62,720
Aug-21 16,398 10,128 7,446 5,530 6,785 5,237 51,523

Worker

Outcome Outside off-payroll working rules (IR35) Self-employed for tax purposes Inside off-payroll working rules (IR35) employed for tax purposes Undetermined (Worker using an intermediary) Undetermined (Worker NOT using an intermediary) Total
Nov-19 6,827 2,430 3,811 1,703 2,235 949 17,955
Dec-19 12,136 5,224 7,053 4,113 3,999 2,214 34,739
Jan-20 27,386 11,959 16,255 9,489 9,839 5,154 80,082
Feb-20 41,294 19,144 19,843 12,158 12,966 7,174 112,579
Mar-20 25,280 19,533 13,327 10,845 8,733 6,032 83,750
Apr-20 1,619 2,703 1,196 2,585 583 1,255 9,941
May-20 1,343 2,528 1,111 2,464 485 1,191 9,122
Jun-20 1,620 2,747 1,249 2,632 569 1,309 10,126
Jul-20 1,883 3,007 1,410 2,702 695 1,460 11,157
Aug-20 1,835 2,997 1,266 2,891 575 1,488 11,052
Sep-20 2,136 3,514 1,563 3,453 717 1,766 13,149
Oct-20 2,761 3,977 2,097 3,627 893 1,883 15,238
Nov-20 3,311 3,986 2,268 3,614 953 1,881 16,013
Dec-20 3,305 3,229 2,287 2,899 1,164 1,557 14,441
Jan-21 6,750 5,504 4,222 4,758 2,371 2,631 26,236
Feb-21 14,088 8,568 7,700 6,320 4,788 3,793 45,257
Mar-21 26,168 15,146 13,415 10,583 9,021 6,300 80,633
Apr-21 11,597 10,151 6,137 7,006 4,009 4,373 43,273
May-21 6,167 5,986 3,241 4,632 1,976 3,113 25,115
Jun-21 4,553 4,873 2,529 3,666 1,496 2,536 19,650
Jul-21 4,190 4,320 2,448 3,376 1,361 2,181 17,876
Aug-21 3,344 3,645 2,099 3,231 1,159 2,003 15,481

Hirer

Outcome Outside off-payroll working rules (IR35) Self-employed for tax purposes Inside off-payroll working rules (IR35) employed for tax purposes Undetermined (Worker using an intermediary) Undetermined (Worker NOT using an intermediary) Total
Nov-19 4,704 1,682 6,818 652 2,539 1,074 17,469
Dec-19 10,923 5,049 10,224 1,889 5,768 2,885 36,738
Jan-20 24,147 8,023 23,655 3,846 13,602 4,521 77,794
Feb-20 40,025 11,798 32,231 5,229 21,605 5,993 116,881
Mar-20 31,779 65,646 20,466 4,392 15,321 4,771 142,375
Apr-20 3,399 20,874 1,622 1,126 1,367 1,491 29,879
May-20 3,010 3,058 1,411 1,130 1,325 1,528 11,462
Jun-20 3,656 3,805 1,923 1,323 1,694 2,003 14,404
Jul-20 4,175 4,109 2,054 1,436 1,901 1,988 15,663
Aug-20 3,500 2,970 2,363 1,261 1,829 1,621 13,544
Sep-20 4,594 4,270 2,981 1,705 2,233 2,222 18,005
Oct-20 5,436 4,799 3,786 1,871 2,590 2,482 20,964
Nov-20 6,872 5,293 5,574 1,899 3,443 2,874 25,955
Dec-20 6,690 10,983 5,230 1,711 3,303 2,191 30,108
Jan-21 12,192 5,899 9,502 2,225 5,755 2,760 38,333
Feb-21 25,399 9,338 17,687 3,570 11,741 4,318 72,053
Mar-21 60,990 16,478 30,954 6,360 25,827 7,740 148,349
Apr-21 31,788 12,286 12,393 4,558 13,302 5,711 80,038
May-21 18,968 11,100 7,604 3,398 8,283 5,198 54,551
Jun-21 17,139 10,184 6,736 2,842 7,350 4,586 48,837
Jul-21 16,092 8,200 6,094 2,629 6,539 4,336 43,890
Aug-21 13,054 6,083 5,347 2,058 5,625 3,083 35,250

Agency

Outcome Self-employed for tax purposes employed for tax purposes Undetermined (Worker NOT using an intermediary) Total
Nov-19 520 261 169 950
Dec-19 823 460 297 1,580
Jan-20 1,826 1,184 665 3,675
Feb-20 2,031 1,584 672 4,287
Mar-20 1,468 1,158 426 3,052
Apr-20 193 114 38 345
May-20 125 117 37 279
Jun-20 186 120 49 355
Jul-20 189 123 62 374
Aug-20 218 131 51 400
Sep-20 235 168 64 467
Oct-20 243 191 60 494
Nov-20 381 227 130 738
Dec-20 298 200 104 602
Jan-21 588 345 182 1,115
Feb-21 980 710 364 2,054
Mar-21 1,979 1,442 730 4,151
Apr-21 1,158 754 407 2,319
May-21 635 386 216 1,237
Jun-21 568 318 196 1,082
Jul-21 462 314 178 954
Aug-21 400 241 152 793

As it is not the agency’s responsibility to determine if the off-payroll working rules (IR35) apply to a contract or other period of work, users continue the CEST journey as if they are the worker to check a determination. Those results are included in the ‘worker’ breakdown and so only results for direct engagements are itemised for this user group.