HMRC’s IR35 Status Tool Usage Falls 73%

What’s Up With the CEST Tool? A Massive 73% Drop

So, IR35 Shield scoured the Office for Information and uncovered a shocking 73 % slide in the use of HMRC’s Check Employment Status for Tax (CEST) tool since the big reforms kicked off on 6 April 2021. Over the last four years, the numbers have only gotten steeper, with last year’s figures falling a whopping 50 % from the previous tax year.

Why Is Everyone Skipping the Tool?

CEST was supposed to be a friendly helper that tells firms whether a contractor is “employed” or “self‑employed” under IR35 rules. Instead, it’s been picking up fewer thumbs‑up and a lot of no‑answer steam‑roller verdicts.

Key Numbers from the FOI Leak

73 % drop in use by intermediaries since the reforms began.
Overall CEST usage fell 50 % in the last full tax year.
Year‑on‑year declines: 18 % (2021‑22 to 2022‑23), 31 % (2022‑23 to 2023‑24), then 50 % (2023‑24 to 2024‑25).
“Outside IR35” decisions rose from 50 % to 64 % for intermediaries without any tweak to the tool’s logic.
Indeterminate results for sole traders ballooned to 26 % – that’s a quarter of users left in the dark.

Dave Chaplin’s Take

“It’s no wonder the tool is drifting out of the spotlight,” says Dave Chaplin, CEO of IR35 Shield. “We expected a little dip after the reforms launched, but then the numbers kept dropping like a bad penny. Companies aren’t just lazy; they’ve realised the tool doesn’t give them the certainty they need.”

“The government body that enforces these rules is also handing out an unofficial, non‑binding, and dismissible questionnaire, and that’s a recipe for mistrust. If you’re paying for the security of your tax status, you’re probably better off looking elsewhere.”

So, What’s Next?

With the tool’s credibility in question, firms are turning to third‑party advisers, legal experts, or their own internal compliance teams for a clearer, more legally safe assessment of IR35 status.

It’s a good reminder that, even in the age of tech, you still need a good human touch and a solid grasp of the law to avoid being caught in the IR35 quagmire.