Right of Substitution not mirrored!

[babason]

I have just found out that my carefully drafted 'Right of Substitution' is not reflected in the Agency - Client contract. My client states they would simply readvertise and reinterview.

My agency (who to be fair have tried to be very accommodating) attempts to square the circle thus:

They state they do not have a one for one contract with the client. They have a Master contract and I'm one of many 'schedules'.

a) If I wish to substitute I must provide the details of the intended substitute.
b) The agency would assess suitability and may request the clients assistance (i.e. they would invite the client to interview the substitute)
c) If found suitable the substitute will be accepted and my invoices will be accepted as per our substitution agreement

Is this credible? As it turns out I'm in a strong position to throw my toys out of the pram but I don't really want to upset all concerned unnecessarily.

[Jason]

In most cases the "right of substitution", hinges on the client agreeing the substitute is acceptable. Meaning the customer thinks the skills holder (consultant or whatever you are calling them) being supplied has the skills to do the job.

The ROS has never been an open book to put in any monkey. I believe this is the situation your EB is trying to control.

As long as you both agree on what is "suitable" and if that means EB client has the right to veto if they think the body is unsuitable then the ROS should be ok.

I am not an expert on this but I think this is how it is enterpreted

[babason]

Hi,

My query isn't about the client's ability to assess skills.

The agency appears to have come up with a clever means of 'substitution' without the client necessarily agreeing to a 'substitution'. If asked the client would say they don't allow a ROS. To the client it would appear that they are terminating my engagement and employing a replacement.

Would HMRC accept this as a valid 'substitution' procedure?

[Fred Bloggs]

Recent case law suggests however, that a few years down the line, the ex-client's HR dept faced with a barrage of leading questions from HMRC will say "We wouldn't accept a substitute anyway".

The special commissioner investigating your case will then ignore anything written in a contract or any evidence that you provide and will decide you are "IR35 caught".

And you will be able to do nothing about it. Welcome the modern new-labour controlled UK. It sickens me. I'm considering joining the exodus of folk leaving this once glorious, sceptered isle.

[ratewhore]

Recent case law suggests however, that a few years down the line, the ex-client's HR dept faced with a barrage of leading questions from HMRC will say "We wouldn't accept a substitute anyway".

The special commissioner investigating your case will then ignore anything written in a contract or any evidence that you provide and will decide you are "IR35 caught".

And you will be able to do nothing about it. Welcome the modern new-labour controlled UK. It sickens me. I'm considering joining the exodus of folk leaving this once glorious, sceptered isle.

Surely then you have the right to sue the agent?

I have a clause stating any upper contracts will not invalidate the IR35 status of my contract so I would seek to sue the agent if found within IR35 due to clauses in the upper contract.

How successful that would be is another matter of course...

[Accountax Consulting]

If the end client will not accept a substitute it does not matter what is in either contract. Talk to your client again. If they are adamant that no substitution is possible then you need to look at the rest of your contract/working practices.

[Fred Bloggs]

How successful that would be is another matter of course...

Oh yes, you've got pots of free cash to throw at a court case. Even though you just paid the revenue all that PAYE and penalties. Silly me, I overlooked that!

[TheFaQQer]

Oh yes, you've got pots of free cash to throw at a court case. Even though you just paid the revenue all that PAYE and penalties. Silly me, I overlooked that!

In a recent IR35 case that the PCG was fighting, HMRC won because the contract between client and EB didn't match that between EB and contractor. Contractor paid up rather than prolong the fight, but IIRC, PCG were prepared to fight on, so that might be an option.

Where's Mal to confirm it?

[Fred Bloggs]

Contractor probably wasn't insured then. Although I think insurance only takes you upto the commissioners anyway. So if you lose there you're basically stuffed unless you rely on charity to bail you out. Not a good strategy........

[TheFaQQer]

Contractor probably wasn't insured then. Although I think insurance only takes you upto the commissioners anyway. So if you lose there you're basically stuffed unless you rely on charity to bail you out. Not a good strategy........

No - they had the insurance to fight the IR35 part. The case hinged on the fact that the agent had lied to the contractor when they said that they could have a RoS. Insurance fights the whole thing, I think.

PCG offered to help fight the agency for breach of contract.

IIRC.