IR35 Review, Not Impressed

[northernladuk]

Not to labour the point too much, the contract defines the workers as follows:

Does this change your advice?

Nope, still doesn't mean you can chop and change them when you see fit.

Technically the guy you bring on isn't a 'worker'. He isn't on the account yet. You do not have a mechanism for agreeing he can come on to the account to become a worker as you have no sub clause.

[JamJarST]

Final update, client is quite happy to add substitution clause and the reviewing company has admitted that they should not have mentioned insurance and apologised so I am a happy man once again

[Greg@CapitalCity]

...so I am a happy man once again

Nice work!

[JoJoGabor]

I guess this is one of the main service providers who bundle in IR35 reviews with insurance? After my last review I got the distinct impression the contract was only skim read and key points were missed which I got changed myself. Next time I will use a specialist service like Bauer and cotrill. You get what you pay for. A free review is not worth the risk I now believe.

[manfromtheagency]

Subsitution clause

Guys,

I have just read through this thread and one thing it fails to mention is the need for the substitution clause to run "back to back". i.e. Your agent must ensure that the substitution clause is also enshrined in their contract with their client, i.e. if the company your agency has supplied you to are not aware of it then it is not legally in place.

I believe it was the "Firefly" case a couple of years ago that made this one of the important battle grounds in IR35 cases.

[Clare@InTouch]

Guys,

I have just read through this thread and one thing it fails to mention is the need for the substitution clause to run "back to back". i.e. Your agent must ensure that the substitution clause is also enshrined in their contract with their client, i.e. if the company your agency has supplied you to are not aware of it then it is not legally in place.

I believe it was the "Firefly" case a couple of years ago that made this one of the important battle grounds in IR35 cases.

Sadly the agency will usually not let you see a copy of the upper contract, probably because it shows your full rate and therefore their commission. Some contracts do include a clause to state that the upper contract matches the lower in all terms, but oddly some contain a clause to say there's no guarantee that the upper matches the lower!

[gary]

I disagree with NLUK. If the contract says the company must provide its staff to perform the agreed services, without naming any particular individual, surely that amounts to the same thing as an unfettered right of substitution? The company is free to send Tom, Dick or Harry to do the job as it sees fit.

Assuming there is no agency involved or, if there is, the end-client/agency contract does not conflict with the lower-level contract, this is a clear IR35 pass.

[radish2008]

EL as well as PI and PL

The company I'm working for has just done a review on insurances and upped the limits to £1M for PI and PL. They also now insist on EL at £1M although the lowest amount Hiscox will give is £5M. Bumped my premiums up from c£300 to c£500 (with Tax Investigation as well). Anyway I pushed back on the EL saying I was exempt but they then stressed it was a plus from an IR35 perspective as it covers substitutes. It's only an extra £40 a year I think so maybe a good buy ?

[manfromtheagency]

Sadly the agency will usually not let you see a copy of the upper contract, probably because it shows your full rate and therefore their commission. Some contracts do include a clause to state that the upper contract matches the lower in all terms, but oddly some contain a clause to say there's no guarantee that the upper matches the lower!

Ah yes, good point. As an agent i like to, where I can, let the contractors know the mark up we are working with when discussing initial rates so nothing is hidden from anyone in the equation.
Always seems to make the relationship a little more equitable!

[malvolio]

The company I'm working for has just done a review on insurances and upped the limits to £1M for PI and PL. They also now insist on EL at £1M although the lowest amount Hiscox will give is £5M. Bumped my premiums up from c£300 to c£500 (with Tax Investigation as well). Anyway I pushed back on the EL saying I was exempt but they then stressed it was a plus from an IR35 perspective as it covers substitutes. It's only an extra £40 a year I think so maybe a good buy ?

I recall answering that one a while back. You need EL if you take on any worker, employed or subbie. Without it your RoS can be easily invalidated and there goes a big part of your IR35 defence kit. For £40, just do it.