IR35 question

[ckms]

Contract offered for 6 months by agent stating outside IR35 working in an organisation with very few if any Ltd co contractors.

Basic review by accountant states they are confident that the contract looks outside IR35.

Went to QDOS for a formal review and they queried the substitution clause wording and suggested an alternative.

End client won't agree to anyone but the assigned contractor carrying out the work so agent won't change the wording.

Can the contractor rely on the advice of the accountant in this instance and sign the contract in its original form as long as working practices are conformed to (outside IR35)?

Not looking to cause issues with the end client as just want to get on and complete the project.

No interest in working inside IR35 with multiple short term contracts successfully completed in 3 - 6 months in the past.

What would you do?

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[northernladuk]

Basic review by accountant states they are confident that the contract looks outside IR35.

Ignore this bit for the bolded reasons. Your accountant does your accounts. Leave the contract review to the specialists.

Went to QDOS for a formal review and they queried the substitution clause wording and suggested an alternative.

I'll take a stab that the right was fettered and the suggestion was to change the wording that the client can't refuse a suitably qualified replacement. This is a common problem and shows that QDOS knows their stuff and also that your accountant doesn't, so ignore the accountants advice.

End client won't agree to anyone but the assigned contractor carrying out the work so agent won't change the wording.

So you've got a problem. No Right of Substitution at all. It's the working practices that are more important than the contract. You've got borderline fail contract and fail working practices.

Can the contractor rely on the advice of the accountant in this instance and sign the contract in its original form as long as working practices are conformed to (outside IR35)?

No and I think you know that really. For a start you've already said that the one working practice you know about fails (no RoS). You've had it reviewed by a specialist who said no and the you've found out since the client won't allow anyone so you are just picking the opinion that suits you. You've got to be more objective than that.

Not looking to cause issues with the end client as just want to get on and complete the project.

No interest in working inside IR35 with multiple short term contracts successfully completed in 3 - 6 months in the past.

There you go then. Decision made.

What would you do?

Depends. I'd probably leave this one. If the client has very few contractors and they won't let you substitute I think you've seen just the tip of the iceberg. I'd put some money on the fact they'll treat you like a permie on site. The only evidence you've seen so far is the sub and that's failed. What else is gonna crawl out of the woodwork when you get on site.

Not one for me I think this... but then I'm not desperate for a gig and can travel so fairly confident I'd be financially better off waiting a little longer for a true outside one. There would also wouldn't be the risk this one brings.

But as I say, you've got to be more objective than you are being. Picking the accountant view as it's the one you want over all the obvious red flags raised is not doing proper diligence.

And if you don't know why the RoS is such a big flag then learn a bit more about IR35. As soon as the client said no you should have known the answer.

[wattaj]

I agree with all of the the above with one small caveat: the market is in the tulipter; perhaps you would be better to take this role and prepare to be caught *if* this ever happens.

Squirl your cash away and wait for the hammer to fall if it ever does... you may be a long time between contracts and I'd be more interested in getting some cash into my company before the maelstrom of next year's IR35 reforms rolling out to the private sector.

Just a thought in passing.

[MasterBait]

Contract offered for 6 months by agent stating outside IR35 working in an organisation with very few if any Ltd co contractors.

Basic review by accountant states they are confident that the contract looks outside IR35.

Went to QDOS for a formal review and they queried the substitution clause wording and suggested an alternative.

End client won't agree to anyone but the assigned contractor carrying out the work so agent won't change the wording.

Can the contractor rely on the advice of the accountant in this instance and sign the contract in its original form as long as working practices are conformed to (outside IR35)?

Not looking to cause issues with the end client as just want to get on and complete the project.

No interest in working inside IR35 with multiple short term contracts successfully completed in 3 - 6 months in the past.

What would you do?

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SJD reviewed my latest contract, came back within 30 minutes saying it's ok
QDOS failed it big time, big chunks of the contract had to be rewritten
Luckily the agency was very cooperative and rewrote with the help of Qdos

[ckms]

The issue is that the end client were consulted by the agency. They said they don't mind the changes being made to the document but they do not accept that a substitute may actually be used. The agency's legal team therefore won't now make the changes to the contract.

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[northernladuk]

So the clause is pointless anyway.

[Patrick@Intouch]

Substitution is just one factor in a much wider and more complex assessment of your contracts (both theoretical [as implied by your working practices] and written [the actual contract].

It is possible to have no real right to substitution and still have an engagement assessed as being outside IR35 (just ask any of the BBC presenters who have won cases against HMRC recently) as any worthwhile review should consider control, MOO, financial risk, part and parcel and many other factors before being able to make a decision.

It would be interesting to see how the agency assessed your contract and if QDOS assessed the contract as inside, or if they just had issue with the substitution clause.

[ckms]

Thanks for your help. All sorted now. QDOS were great as they intervened and I then emailed the client to put their mind at rest. They now understand the substitution clause and are willing to abide by it and have the contract wording changed.

Unfortunately the agent sat on this for weeks hoping I would just cave in and sign despite my genuine insistence that I would walk away if things weren't sorted out.

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[TheCyclingProgrammer]

I wouldn’t turn down a contract due to a weak or non existent substitution clause. Let’s face it, most clients are hiring you and expect you, nobody else. Substitution clauses are generally shams intended as a quick fix for IR35 and nothing more.

You only need to pass one of the tests of self employment and it’s perfectly possible to be outside IR35 without a substitution clause. Focus on direction and control and MOO. These are more important IMO.