Close Menu
  • News
  • Home
  • In Profile
  • Finance
  • Legal
  • Technology
  • Events
  • Features
  • Wellbeing & Mental Health
  • Marketing
  • HR & Recruitment
  • About
  • Advertise
  • Events Calendar
  • Business Wall
  • Subscribe
  • Contact
  • 0843 289 4634
X (Twitter) LinkedIn YouTube
Trending
  • Trading Standards Investigation Highlights Huge Differences in Gold Buying Offers
  • How SMEs can win at AI search without a big budget
  • SME Today talks to Ian Hills, founder of Purple Pilchard
  • Why Western businesses still get Africa wrong
  • Wiltshire Web Firm One Of First In The Region To Become An Expert Partner Of Woocommerce
  • Paralympic Gold Medallist Joins Loo Of The Year Awards As Ambassador
  • Seven Major Platforms Now Police AI-Generated Content
  • What 100 UK Engineering Websites Tell Us About Turning Technical Expertise Into Enquiries
X (Twitter) LinkedIn YouTube
SME Today
  • About
  • Advertise
  • Events Calendar
  • Business Wall
  • Subscribe
  • Contact
  • 0843 289 4634
  • News
  • Home
  • In Profile
  • Finance
  • Legal
  • Technology
  • Events
  • Features
  • Wellbeing
  • Marketing
  • HR & Recruitment
  • Travel
SME Today
  • About
  • Advertise
  • Events Calendar
  • Business Wall
  • Subscribe
  • Contact
  • 0843 289 4634
  • Twitter
  • LinkedIn
  • YouTube
  • RSS
You are at:Home»Legal»Users continue to abandon HMRC’s IR35 tool
CEST usage 2020 to 2026

Users continue to abandon HMRC’s IR35 tool

0
Posted By sme-admin on June 30, 2026 Legal
A Freedom of Information (FOI) request submitted by IR35 compliance specialist IR35 Shield has revealed that usage of HMRC’s Check Employment Status for Tax (CEST) tool fell by a further 43% during the 2025-26 tax year, continuing a dramatic downward trend that has seen overall usage collapse by 71% in just two years.
The latest figures show total CEST usage falling from 458,894 determinations in 2023-24 to 135,178 in 2025-26, a 71% reduction. Also, approximately one in five users continues to receive an indeterminate result from the tool.*
The findings suggest that firms are continuing to abandon CEST in favour of alternative status assessment solutions and more comprehensive compliance processes.
Commenting, Dave Chaplin, CEO of IR35 Shield, said: “The headline finding is simple: CEST usage has fallen again by a further 43% in the last year and 71% in the last two years. Firms are choosing better alternatives.
“The majority of firms we speak to for the first time are either lifting blanket bans or seeking to move away from using CEST, having realised it is not compulsory to use, nor does it give them the level of certainty they need.
“For the best protection, firms should use a full compliance service from specialists with front-line HMRC status enquiry and tribunal experience who deliver certainty whilst alleviating the administrative burden.”
The decline comes despite no changes to the tool or legislation and follows years of criticism from contractors, advisers and employment status experts regarding CEST’s reliability.
Added Dave Chaplin: “Businesses are increasingly recognising that weak status determination processes can create significant long-term compliance problems.
“Firms do not want the risk of an HMRC compliance check dragging on for years. They want robust assessments, comprehensive processes and confidence that an HMRC compliance check will be completed within months, rather than years.”
The latest figures may also be due to CEST becoming outdated and no longer reflecting current employment status law.
Continued Dave Chaplin: “The underlying CEST logic has not been updated since November 2019 and was based on HMRC’s view of the law at that time. Despite the courts dismissing HMRC’s position in key areas, upon which the tool was based, the tool has not been updated.
“HMRC lost a recent employment status case involving PGMOL, where the judge concluded that the engagements contained none of the hallmarks of employment. Yet if you input the facts of that case into CEST, the tool reaches the opposite conclusion and implies the case was finely balanced, which is plain wrong.
“CEST remains misaligned with the law and does not provide the reliability firms need. The continued decline in CEST usage reflects that.
Key findings from the FOI response:
• Overall CEST usage fell by 43% in 2025-26 compared with 2024-25.
• Overall CEST usage has fallen by 71% in the last two years.
• 67% of intermediary determinations are now classified as Outside IR35.
• Approximately one in five intermediary users receives an indeterminate outcome.
• Approximately one quarter of sole trader users receive an indeterminate outcome.
*HMRC Freedom of Information response FOI2026/60608, obtained by IR35 Shield, June 2026.
About IR35 Shield:
IR35 Shield is a leading specialist consultancy in IR35 with over 20 years of experience in the crucial area of status case law. IR35 Shield provides market-leading IR35 status determination software, IR35 training, and expert legal and tax defence services to support firms in all matters related to IR35 status compliance.
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

The remote-work policies that could put employers at legal risk

Why European and British businesses are falling foul of UK worker visa rules

50:50 Deadlock: The Warning Signs of Shareholder Dispute and What to Do About It

Comments are closed.

Follow SME Today on Linkedin and share all the topics you find interesting
Porsch Reading – Find Your Perfect Business Partner
Mastermind9
Events Calendar
    November 26, 2026 10:00 am

    South West Expo Swindon

    October 14, 2026 10:00 am

    Thames Valley Expo Reading

  • Marketing
August 26, 2026

How SMEs can win at AI search without a big budget

August 26, 2026

SME Today talks to Ian Hills, founder of Purple Pilchard

  • Finance
August 26, 2026

Trading Standards Investigation Highlights Huge Differences in Gold Buying Offers

August 19, 2026

AI is making pension scams harder to spot

  • People
August 18, 2026

From Redundancy At 23 To Multi-Million Pound Success: Welsh Ceo To Share Her Story

August 10, 2026

Lloyds appoints Fiamma Morton as Managing Director for SME banking across the UK

  • Health & Safety
August 18, 2026

Employers Warned Not To Delay Vital Safety Training Ahead Of Employment Law Change

July 21, 2026

Loo Of The Year Awards Named Finalist In Prestigious European Industry Awards

  • Events
August 13, 2026

Entries extended for the awards putting solo female founders on a stage of their own

June 29, 2026

Great British Expos Postpones South West Expo Due to Extreme Heat Forecast

  • Community
August 13, 2026

Independent British Author Reaches No.1 on Amazon & Donates Profits to Charity

June 19, 2026

Founders charity dinner set to raise funds for epilepsy care

  • Food & Drink
August 12, 2026

Small Food & Drink Business Owner Gripes

June 23, 2026

How To Market A Restaurant

  • Books
August 24, 2026

Leadership Amid ‘the Perfect Storm’: Expert Shares Fundamentally Different Approach

August 13, 2026

Independent British Author Reaches No.1 on Amazon & Donates Profits to Charity

The Newsletter

Join our mailing list for the best SME stories, handpicked and delivered direct to your inbox every two weeks!

Sign Up
About

SME Today is published by the same team who deliver The Great British Expos’. We have been organising various corporate events for the last 10 years, with a strong track record of producing well managed and attended business events across the UK.

Join Our Mailing List

Receive the latest news and updates from SMEToday.
Read our Latest Newsletter:


Sign Up
X (Twitter) YouTube LinkedIn
Categories
  • Books
  • Business
  • Community & Charity
  • Education and Training
  • Environment
  • Events
  • Features
  • Finance
  • Food and Drink
  • Health & Safety
  • HR & Recruitment
  • In Profile
  • Legal
  • Marketing
  • News
  • People
  • Property & Development
  • Sponsored Content
  • Technology
  • Transport, Travel & Tourism
  • Wellbeing & Mental Health
Magazine Information
  • About SME Today
  • Editorial Submission Guidelines
  • Advertising
  • Privacy
  • Contact
  • Editorial Complaints Policy
Copyright © 2026 SME Today.
  • About SME Today
  • Editorial Submission Guidelines
  • Advertising
  • Privacy
  • Contact
  • Editorial Complaints Policy

Type above and press Enter to search. Press Esc to cancel.

Subscribe Now!

Sign up for a FREE subscription and receive the latest news, features and updates from SMEToday:

I am interested in:
 

Thank you for subscribing to SME Today! We're thrilled to have you join our community. To complete your subscription, please check your email and click on the confirmation link. If you don’t see the email in your inbox, be sure to check your spam or junk folder. We look forward to sharing exciting news, updates, and exclusive content with you!

Join our mailing list to receive the latest news and updates from SMEToday
Read our Latest Newsletter: