Can the substitute be billed at a lower rate?

[ecc83]

Not to labour a point here but I think it is key. The sub is doing a different piece of work. This seems to get glossed over but to me is the bit that breaks the whole scenario.

I read it as: same project/work, different scope. So it's a helper/assistant rather than a sub.

The builder analogies are bogus - who pays a builder by the day!? - but if someone was building a wall for you and said, look, I won't be in this week, but I'll send the lad in and he'll do a few little jobs and keep things ticking over - you as client would have a reasonable expectation to pay less for that.

Seems ok to me. Employees can't use helpers, right?

[Wanderer]

Slightly different analogy. You hire a building company to build a wall, and they provide a quotation. The builder wishes to hire a sub to finish off that task.

• If you pay less, then this is not substitution

Says who?

The HMRC questionnaire is pretty clear actually. "Have you sent a subbie in when you couldn't work", if the answer is yes then you are straight into the lower risk category. Most likely it would be "Thanks for your time, no further questions".

What if you hire a tradesman to do a job and something else comes up so he subs it out to his apprentice and the tradesman gives you a discount as a recognition that the subbie isn't quite as skilled?

Spin it around the other way. Would a permie ever pay someone to cover for him while he took a holiday and take a pay cut for doing so? No, of course not.

[rd409]

Says who?

The HMRC questionnaire is pretty clear actually. "Have you sent a subbie in when you couldn't work", if the answer is yes then you are straight into the lower risk category. Most likely it would be "Thanks for your time, no further questions".

What if you hire a tradesman to do a job and something else comes up so he subs it out to his apprentice and the tradesman gives you a discount as a recognition that the subbie isn't quite as skilled?

Spin it around the other way. Would a permie ever pay someone to cover for him while he took a holiday and take a pay cut for doing so? No, of course not.

The key here is different scope. What I said was if you offer to charge less for the same piece of work done by someone else, then this shows control by the client, which is not good.

Also because the work is out of scope for the original schedule, I would recommend, the OP raise a quotation for additional work, and then hire a helper to get that done. Remember, now he is charging differently for additional work that was not covered by the original contract, so he can technically hire a sub/helper to get that piece of work done.

Lastly, why would a permie pay someone to cover him when he is on holiday? He gets paid holidays, unlike contractors. The whole scenario of substitution is to keep the project going and money rolling in.

[VirtualMonkey]

get a new contract drawn up for your company to supply the 'help' at the lower rate then exercise MOO on your own contract for the term.
surely that would look good when considering IR35