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    substituting

    Hi,
    I'm currently in an outside ir35 contract - have the right of substitution etc. A colleague is leaving soon (another contractor with an outside IR35 contract).
    The project we're working on is getting quite busy and so I've suggested my colleague comes back and substitutes for me for 2 weeks while I'm on holiday in a months time - this is all ok'd.


    So the questions:
    - are there any template contracts for me to do this - not worth getting a lawyer to draw one up as only for a short term - I assume just a normal outside ir35 contract?
    - are there any dangers from a tax perspective in doing this - I cant see it other than being a benefit but dont want to mess anything up for either of us (e.g. hmrc hitting my substitute for some reason)
    - anything I'm missing - anyone had issues doing this?

    Thanks

    #2
    Originally posted by slogger View Post
    Hi,
    I'm currently in an outside ir35 contract - have the right of substitution etc. A colleague is leaving soon (another contractor with an outside IR35 contract).
    The project we're working on is getting quite busy and so I've suggested my colleague comes back and substitutes for me for 2 weeks while I'm on holiday in a months time - this is all ok'd.
    Sounds like a sweet deal. There is a standard set of stuff I'd say you need to do but sounds like that will be easily coverable if he's an ex colleague. You need to make sure his access is back up in time for him to start and he's got all the relevant access to your work. You also need to get them up to speed with what to do on your time, not the clients. A sub needs to be able to carry on where you left off to the minute. If not they are replacement not a sub. But I think all that is splitting hairs because you've got someone who already has all that so fill your boots.
    So the questions:
    - are there any template contracts for me to do this - not worth getting a lawyer to draw one up as only for a short term - I assume just a normal outside ir35 contract?
    Yep. QDOS do standard IR35 templates somewhere on there site. You could also try the google search as we've been asked for standard templates a few times so might find some other options.
    - are there any dangers from a tax perspective in doing this - I cant see it other than being a benefit but dont want to mess anything up for either of us (e.g. hmrc hitting my substitute for some reason)
    - anything I'm missing - anyone had issues doing this?
    Probably none but I'm not sure how the new rules and SDS come in to play here. That said for two weeks I wouldn't be sweating it. Fill the contract in, sign, get him in to do his two weeks and pay him and move on. I can't think for one minute HMRC are remotely interested in two weeks of work. Certainly a case where you could over think this and worry about nothing.

    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      A contractor actually using ROS

      I did this many years ago; cover for 5 days, had to get it approved and him on-site (remember that?) but other than that, I agreed a rate with him and paid him from the company coffers when he invoiced. If I recall, there was a standard contract I found which covered the basics and passed liability on to him if something went wrong.

      But I'm sure someone will be along shortly to tell you your contract isn't actually Outside and you're in danger of a large bill a few months down the line when the status changes. Which will definitely happen.

      Comment


        #4
        Originally posted by ensignia View Post
        A contractor actually using ROS

        I did this many years ago; cover for 5 days, had to get it approved and him on-site (remember that?) but other than that, I agreed a rate with him and paid him from the company coffers when he invoiced. If I recall, there was a standard contract I found which covered the basics and passed liability on to him if something went wrong.

        But I'm sure someone will be along shortly to tell you your contract isn't actually Outside and you're in danger of a large bill a few months down the line when the status changes. Which will definitely happen.
        lol - thats part of the fun of contracting ;-)

        Comment


          #5
          Originally posted by northernladuk View Post

          Sounds like a sweet deal. There is a standard set of stuff I'd say you need to do but sounds like that will be easily coverable if he's an ex colleague. You need to make sure his access is back up in time for him to start and he's got all the relevant access to your work. You also need to get them up to speed with what to do on your time, not the clients. A sub needs to be able to carry on where you left off to the minute. If not they are replacement not a sub. But I think all that is splitting hairs because you've got someone who already has all that so fill your boots.

          Yep. QDOS do standard IR35 templates somewhere on there site. You could also try the google search as we've been asked for standard templates a few times so might find some other options.

          Probably none but I'm not sure how the new rules and SDS come in to play here. That said for two weeks I wouldn't be sweating it. Fill the contract in, sign, get him in to do his two weeks and pay him and move on. I can't think for one minute HMRC are remotely interested in two weeks of work. Certainly a case where you could over think this and worry about nothing.
          thanks for this - really good.
          yes we'll just suspend his access for a month till they come back - didnt think of using QDOS (I use their insurance so have a login)

          Comment


            #6
            Be clear that substitution is not putting in a temp replacement worker it is having another worker taking over the existing B2B contract. So there should be no need for a new contract with the client. What you need is something between you and the other guy to cover how and what he gets paid; a purchase order on his company may suffice...

            The logistics of getting him on site are a separate issue.
            Blog? What blog...?

            Comment


              #7
              Originally posted by ensignia View Post
              But I'm sure someone will be along shortly to tell you your contract isn't actually Outside and you're in danger of a large bill a few months down the line when the status changes. Which will definitely happen.
              Yawn.Change the record. You call other people for posting the same thing over and over again and you are the worst for it.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Originally posted by ensignia View Post
                A contractor actually using ROS

                I did this many years ago; cover for 5 days, had to get it approved and him on-site (remember that?) but other than that, I agreed a rate with him and paid him from the company coffers when he invoiced. If I recall, there was a standard contract I found which covered the basics and passed liability on to him if something went wrong.

                But I'm sure someone will be along shortly to tell you your contract isn't actually Outside and you're in danger of a large bill a few months down the line when the status changes. Which will definitely happen.
                I would ask if RoS actually matters in a world of Chapter 10 IR35 determinations?

                I would also ask if the substitution works given it's an ex-colleague for a whole set of other reasons relating to case law I half remember but can't be arsed to read in detail.

                But I think Malvolio covers the other issues I would mention.
                merely at clientco for the entertainment

                Comment


                  #9
                  Fwiw, this probably has little value for IR35 purposes, given your sub currently works for the client, but I guess that isn’t the reason you’re doing it.

                  Comment


                    #10
                    Originally posted by jamesbrown View Post
                    Fwiw, this probably has little value for IR35 purposes, given your sub currently works for the client, but I guess that isn’t the reason you’re doing it.
                    I'm sure I read somewhere in HMRC's 'guidance' that if the substitute was a previous/current supplier to your client, it would not really prove anything IR35-wise. Presumably they were trying to avoid a bunch of contractors on the same project all being each other's substitutes for a day, allowing them to answer "Yes" to the 'have you ever used a substitute' question in CEST. That said, I've tried to locate this with a search and haven't found it, so maybe it's out of date.

                    [Edit]
                    This article alludes to the same issue: https://www.contractoruk.com/news/00...wake_lppl.html
                    Last edited by meanttobeworking; 22 April 2022, 13:44.

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