IR35 check: CEST, the status tests and the client's statement

Using an IR35 assessment tool, and making the result worth something

1. Use CEST for HMRC's view, and read the condition attached. GOV.UK says the CEST tool gives HMRC's view of a worker's employment status based on the information you provide, and that HMRC will stand by all results given by the tool as long as the information you give remains accurate and is in accordance with their guidance. The condition is the whole value of the result.
2. Answer it about the engagement as worked. CEST asks about substitution, control over how the work is done, and whether the client provides the equipment and decides the working pattern. Answering from the contract rather than from what happens on the ground produces a result nobody will stand behind when the facts are examined.
3. Keep the output with its date and inputs. Print or save the result and the answers that produced it. A result on its own proves nothing later; a result plus the questions and answers, dated, is evidence of what the engagement looked like when it was assessed and of the basis on which you relied.
4. Ask the client for the statement and its reasons. Where the client is medium or large, GOV.UK says the client determines the worker's employment status for tax and should produce a status determination statement including the reasons for the determination. Reasons are what make a blanket policy applied to a whole role visible for what it is.
5. Use the disagreement process before anything else. If the reasons do not match the engagement, put the mismatch in writing to the client and use its disagreement process. A contract review by a specialist can help you frame that, and it is worth doing while the engagement is live rather than after the determination has already set how you are paid.
6. Re-check when the work changes. An extension into different work, a new manager who supervises your method, or a move onto the client's rota can change the position. A determination made on the original scope does not cover work that no longer resembles it, and a fresh check is cheaper than an enquiry.

Common questions

Is a CEST check reliable?

It gives HMRC's own view on the answers you provide, and GOV.UK says HMRC stands by all results the tool gives as long as the information remains accurate and accords with their guidance. It is only as good as the answers, and it declines to decide some borderline cases.

Who has to give me a status determination statement?

A medium or large client. GOV.UK says the client determines the status and should produce a statement including the reasons. A small client does not make the determination at all: the original rules apply and your own company is responsible.

Can I challenge an IR35 determination, or retake the IR35 test?

Yes, through the client's disagreement process. Address the reasons rather than the conclusion, and point to how the engagement is actually worked: control, personal service and substitution are where determinations are most often wrong.

Do I need a paid IR35 contract review, or is a free IR35 checker enough?

Not always, but on a high-value engagement with a determination you doubt it is cheap insurance, because it produces a written analysis of control, substitution and mutuality that you can put in front of the client rather than an opinion you assert.

What should an IR35 status determination include?

Its reasons. Where the client is medium or large, GOV.UK says it determines the worker's employment status for tax and should produce a status determination statement including the reasons for the determination. The reasons are what you check against control, personal service and substitution as the work is actually done, and they are what make a blanket policy applied to a whole role visible.

Does the CEST tool IR35 result bind HMRC?

GOV.UK says HMRC will stand by the result as long as the information given remains accurate and the answers accord with its guidance, so keep the printed determination and the answers you gave with the contract. It binds nothing if the engagement then changes, and it binds nobody at all where the tool returns that it cannot determine the status.

Take-home pay by jurisdiction

• Take-home pay in United Kingdom