FOI release

Check Employment Status for Tax (CEST): 2019 Enhancement Summary

Updated 23 September 2021

1. About this release

A number of Freedom of Information (FOI) requests were made about the 2017 CEST service and we have already received some requests about aspects of the recent enhancement. This release of information anticipates the interest about all the work done.

Most of our work with stakeholders was done on a confidential basis and respecting that, we have anonymised the data linked to this release. We are also unable to provide detail on the reviews and comparisons we did with commercial tools that were created to ascertain status.

2. Background

How a worker is taxed will depend on what their employment status is for tax purposes. Employment status for tax and National Insurance contribution (NIC) is established by key criteria determined by the courts.

HMRC introduced the CEST service in 2017 to help employers (or hirers) and workers to determine how the work being done should be dealt with for tax purposes.

The CEST service provides a determination in straightforward cases: in more complex cases HMRC’s Employment Status manual and helpline supports its customers in making that decision.

The CEST service considers the employment status for:

• workers who provide their services directly to the hirer
• workers who provide a personal service to the hirer via an intermediary, for example their own personal service company

The CEST service is versatile and can be used by the hirer, the worker or any agency providing a worker’s labour.

In response to consultations, a review of the service led to the identification of accessibility issues. Following extensive work to respond to these issues an enhanced version went live on 25 November 2019.

2.1 Summary of work done

HMRC used a variety of sources to scope where CEST could be improved and worked with more than 300 stakeholders, in both groups and individually, to enhance the service.

We have made CEST questions clearer and easier to understand and included additional questions so CEST is able to consider more detailed information provided by the user.

In response to stakeholder feedback we have published guidance to help customers use the tool and support the use of the CEST service.

The enhanced CEST service has received positive comments from stakeholders;

• ‘this looks good and I will be recommending that my clients and contractors use it’
• ‘have now had the chance to work through this with a couple of scenarios and it works well’
• ‘the new version is an improvement’

3. What we have done to enhance the service

3.1 Scoping work

Scoping work began in August 2018. We started with a review of comments made on the 2017 version of the tool, based on customer feedback. In addition, we looked at the accessibility standards to ensure accessibility for users with disabilities.

We explored whether we had captured the full extent of the areas we needed to consider enhancing through meetings with compliance, tax technical and legal HMRC staff.

We tested our initial understanding with external stakeholders holding 8 exploratory meetings with 15 stakeholders in September 2018 and November 2018.

We expanded this exploratory work holding 10 roundtable events, speaking to over 70 users attending these events. A summary of the results can be found in our roundtable event analysis.

We reviewed the recent litigation cases and examined our understanding of employment status in the light of the findings.

Following requests from our stakeholders to include further questions to review a worker’s business in the round, we worked on designing questions that would meet that demand.

3.2 Accessibility and interim improvements

The early work on the enhancements showed some usability and accessibility issues. Using the Web Content Accessibility Guidelines we made changes on 22 May 2019. The changes consisted of;

• refactoring i.e. new templates and accessibility features
• bug fixes e.g. ensuring the back button in a browser worked
• a time out warning
• date and time on the PDF

3.3 Developing the enhancements

The scoping work formed the basis for our testing programme.

HMRC’s CEST service was developed under Agile.

In Agile, all code is fully integrated and tested at all times. Whenever there are new features, all the existing and new tests are run automatically and have to be passed before the new feature is merged.

If the test fails, the development team is notified and the issue will be fixed immediately, preventing any bug from growing into a fatal error.

Here is description of the testing plan and approach.

3.4 User research usability testing

Using our initial research we conducted usability sessions with 64 people on a one-to-one basis.

The aim of the usability testing was to:

• test the developing service with likely users to make sure it meets their needs
• understand and resolve usability issues

A key findings report was produced on a fortnightly basis. This was shared with the technical and policy teams working on CEST and used to make adaptations for the next round of user testing.

3.5 Research was done with a broad range of users

This included:

• those with limited digital access and confidence
• people with a range of visual, hearing, motor and cognitive impairments
• people who use assistive technologies like screen readers or speech recognition software

Each page of CEST links to an accessibility statement confirming that the service is fully compliant with the Web Content Accessibility Guidelines version 2.1 AA standard.

3.6 Additional stakeholder events

We held roundtable sessions with 25 stakeholders who would be advising people on how to use the tool.

In September 2019 we shared the service and the steps we had taken to arrive at the current version with over 150 stakeholders at 14 events.

We used the comments and suggestions to make further adjustments to CEST, notably removing one question that users found difficult to answer.

3.7 Technical testing

Prior to release we carried out extensive testing;

• testing the enhanced version against settled litigation cases
• testing against the 2017 version of the service
• testing against live compliance cases

We have compiled details of the work done and the results. We identified no significant issues and the service produced results in line with HMRC’s view of status.

3.8 Service Standard Testing

The HMRC Standards Assurance team assessed CEST against the cross-government service standards. The assessment can be found here.

There was no requirement for the Cabinet Office Service Assessment team to carry out an assessment on a digital tool as it is not a transactional service. A service is transactional if it allows users to either:

• exchange information, money, permission, goods or services
• submit personal information that results in a change to a government record

3.9 Cost of product

HMRC has invested significant time and resource into the enhancements of the service.

The original service build cost £610,000 with £21,500 spent on continuing development to February 2019.

The enhancements were developed and tested iteratively in Agile at a cost of £1.1 million

We allocated £110,000 for the first 6 weeks after the go live date to cover staff costs to correct any issues that might have arisen.

10.4 full time contractor units were allocated to the enhancement project. The HMRC digital project spend covers HMRC staff, IT supplier costs, and non-staff costs as required.

Due to the collaborative and cross-cutting nature of such development it is not possible to attribute the associated spend on contractors to any one project.

3.10 Usage data

• our digital services have supported 181,914 CEST users, with 138,031 CEST users in the period 24 September 2019 to 24 November 2019, an increase of 32% in digital traffic in the period 25 November 2019 to 31 January 2020

• the completion rate has increased by 9% to 88%, indicating customers find the wording of questions easier to understand, making results more reliable

• CEST has provided a determination in 80% of uses in the period 25 November 2019 to 31 January 2020. An individual user may produce more than one determination in one session

• CEST provides 3 outcomes for users asking if the IR35 rules apply. In the period between 25 November 2019 and 31 January 2020 the split between the outcomes was as follows:

Category	Number of outcomes
Determinations Inside IR35	91,665
Determinations Outside IR35	123,924
Unable to Determine	56,026
Overall total	271,615

• we received 139 digital queries through the online service, an increase of 50% from the previous 2 months before the launch of the enhanced CEST tool

• the Employment Helpline has received 2,321 calls between 25 November 2019 and 31 January 2020, compared to 2,251 calls between September 2019 and the launch of the enhanced CEST tool on the 25 November 2019. This is an increase of 3.1% from the previous 2 months before the launch of the enhanced CEST tool (calls were answered in an average of 1 minute 59 seconds between 25 November 2019 and 31 January 2020)

• CEST guidance has been used by 57,958 users

• the peak use was 8,584 users on 28 January 2020, with 902 using the tool at 2pm. Current user figures demonstrate that the system is working well within capacity

4. Forward look

We will continue to review comments and make changes to clarify the language. We will keep developments in the courts under review and ensure changes are made if required.

5. Further information

The CEST tool and supporting guidance can be found at the following links;
CEST Service

Employment Status manual

The supporting Decision Rule engine for CEST is a also accessible.