HM Revenue and Customs (HMRC) has announced that its Check Employment Status for Tax (CEST) digital tool will receive a series of updates starting 30 April 2025, aimed at improving user experience and offering clearer guidance on employment status determinations.
The CEST tool, introduced in 2017, is used by businesses and contractors to determine whether a worker should be classified as employed or self-employed for tax purposes — a key consideration under the IR35 legislation. According to HMRC, the upcoming changes will include enhanced instructions intended to help users better understand and navigate the process.
However, despite these improvements, experts caution that the tool’s underlying issues remain unaddressed.
Critics have long argued that the tool can produce unreliable outcomes, particularly in complex cases where employment status is not clear-cut. Previous legal challenges have also revealed that CEST's decisions may not always align with tribunal judgments.
HMRC has stated that updated guidance will be released alongside the changes, but has not indicated any changes to the legal framework or the tool’s decision logic.
Professionals continue to advise caution.
The updated version of CEST and its accompanying guidance is available on HMRC’s official website from 30 April 2025.
