Newly released data obtained by IR35 Shield through a series of Freedom of Information (FOI) requests reveals a substantial decline in the use of HMRC’s Check Employment Status for Tax (CEST) tool. Usage has fallen by 73% since the 2021-22 tax year, with the most recent year (2024-25) alone showing a 50% year-on-year decrease in total determinations.
The CEST tool, introduced by HMRC to assist in determining employment status for tax purposes under the IR35 legislation and for sole trader engagements, has experienced a continual annual decline in usage across both intermediary and non-intermediary (sole trader) categories.
Usage Trend: Year-on-Year Decline
Data obtained from HMRC indicates:
- Total CEST usage peaked in 2021-22 at 806,432 determinations. By 2024-25, usage had dropped to 227,382 – a 72% decrease.
- Intermediary use (e.g. contractors via PSCs or partnerships) fell from 512,025 in 2021-22 to 138,758 in 2024-25 – a 73% drop.
- Sole trader usage declined from 294,407 in 2021-22 to 88,624 in 2024-25 – a 70% reduction.
This trend reflects a consistent year-on-year decline. The annualised change in overall usage was -18% (2022-23), -31% (2023-24), and -50% (2024-25).
Change in Determination Outcomes
The distribution of outcomes generated by CEST has shifted during the same period:
- For intermediary assessments, the proportion of determinations falling outside IR35 increased from 50% in 2020-21 to 64% in 2024-25, despite no changes being made to the tool’s underlying logic.
- Indeterminate outcomes for sole trader assessments rose from 22% in 2020-21 to 25% in 2024-25, indicating that in one out of four cases, the tool fails to provide a clear classification.
Delays and Refusals: The FOI Process
The CEST usage data was released only after multiple FOI requests submitted by IR35 Shield between March 2023 and June 2025. Initial requests were refused under Section 22(1) of the Freedom of Information Act, citing future publication intentions. Subsequent appeals and resubmissions were also declined, with references to unspecified publishing timelines.
It was not until June 2025 that the data was finally disclosed. The released figures include usage from 2020-21 through to 2024-25, based on consolidated statistics provided in separate tranches by HMRC.
Summary
CEST was introduced to support organisations in determining whether a worker should be taxed as employed or self-employed. It became particularly significant following the rollout of off-payroll reforms to the private sector on 6 April 2021.
While the tool was promoted as a means of simplifying compliance, the data now suggests a significant ongoing withdrawal in its use by the market.
