If I can't provide a substitute am I screwed?

[Fred Bloggs]

If a contractor ruled to be in hidden employment and obliged to pay taxes as he would be paying being employee.. My question is - wont would-be employer in such a case (i.e. client) obliged to pay employer's NI which they would pay having employing that person as employee?

cant formulate it simpler... anyone?

You're wrong. Employment status in an IR35 case does not make the client an employer for the purposes of taxation. The liability is yours. And yours alone.

[Fred Bloggs]

It needs to go before a judge - IMHO it will be thrown out before Hector has time to warm his backside.

You maybe right time will tell. What really is of concern here is that-

a) I do not have the personal resources to take a case that far (to appeal or high court).

b) My IR35 insurance (unless I'm mistaken) with QDOS stops at special commissioners.

So, if Hillier's view stands, then if you get him on an IR35 inquiry, you may as well just pay.

[tim123]

In a nutshell, it is Hilliers ruling that really worries me. If other commissioners follow his lead this effectively means your contract clauses are meaning less on the say so of a HR numpty. In no other area of UK law are contracts so readily ignored.

No, it's not on the say so of an HR numpty. It's in the opinion of a judge. If you think that the clauses in your contract match reality then (if it gets to court) it is your task to provide the witnesses to show this.

I know that people find it a problem with HR people taking the tough view on whether a sub would be allowed, but I (as a 30 year experienced engineer) find it impossible to believe that in the mayority of HiTech jobs putting in a sub has a business case that would ordinarily be acceptable to a client.

I just happen to have a new contract in front of me. It has a subs clause. It says "the provision of a sub must ... not delay or reduce in quality the work delivered due to the lack of technical or Client knowledge held by the substitute".

In the world that I work in, meeting this requirement would be almost impossible. Can you say that it wouldn't in yours?

tim

[tim123]

In no other area of UK law are contracts so readily ignored.

And another point.

If by "area of law" you mean IR35 then you are wrong. It is perfectly normal, and usual, to ignore the written contract in all employment disputes.

The contract is considered as an indicator, but if the actual working conditions suggest something else, then the working condition will prevail.

tim

[tim123]

I still say that if you have taken all precautions to do what you are meant to, no Judge in the land will say you are 'personally' responsible for the above scenario if the contract signed by all parties clearly states that you can substitute. .

AIUI the problem with the Hillier case is that the contract signed by all parties didn't say that. Only two of the three parties had so agreed.

tim

[malvolio]

You maybe right time will tell. What really is of concern here is that-

a) I do not have the personal resources to take a case that far (to appeal or high court).

b) My IR35 insurance (unless I'm mistaken) with QDOS stops at special commissioners.

So, if Hillier's view stands, then if you get him on an IR35 inquiry, you may as well just pay.

Should have joined the PCG then...

[Fred Bloggs]

Should have joined the PCG then...

I'm very open minded on that. If paying PCG instead of QDOS gives me better protection for similar outlay, I'll pay.

[malvolio]

I'm very open minded on that. If paying PCG instead of QDOS gives me better protection for similar outlay, I'll pay.

Purely for IR35 there's not much in it, TBH. For tax investigation coverage I believe the PCG package has much wider scope, and for PCGPlus you are covered for any status enquiry, not just ones that turn into IR35 ones.

There's also the other extras that are worth serious money if bought separately of course - but only of value if you use them.

Again it only really covers you up to the Specials, but the Jones were still running on it at the House of Lords: if the case is supportable, it is supported.

[Fred Bloggs]

OK thanks, maybe it's time I took another look. I only need IR35 cover, I have no exposure to S660 and MSC issues. AFAIK the QDOS package covers all HMRC enquiries made into myself or my company. But "protection" only from IR35 losses.