Can the substitute be billed at a lower rate?

[yetanotherbob]

Hi All,

Is it allright to charge lower for a substitute?

Thanks.

[northernladuk]

Why are you asking? some context would be useful. Your sub comes and fills your boots so the billing system doesnt change. You invoice as normal and you pay the sub whatever you want. He is subbing your position not the company.... or have i read this all wrong?

Any chance of a little more info?

[Gentile]

Hi All,

Is it allright to charge lower for a substitute?

Thanks.

To you?, or to ClientCo? Any substitution made under the contract your company agreed, should be supplied and paid for by you. Whether you are charging ClientCo more or less than the subbie is costing you should be immaterial, and how much you're being paid should stay as stated in your contract. If ClientCo is being billed directly by the subbie, they're an alternative supplier rather than a substitute per se, and it'd be entirely between ClientCo / the agency and them as to what they would be paid.

[yetanotherbob]

ClientCo is suggesting I charge lower for the days that only the sub would be onsite as he'll work on on a smaller piece of work and not be familiar with everything about the project.

I'm inclined to agree. But as pointed out in the thread, this does sort of mean that I don't invoice them the contracted rate.
It's like my company billing slightly less for a smaller piece of work but then I'm wondering if this might have other implications that I may not have fully considered...

[thunderlizard]

It all sounds perfectly OK to me

[FarmerPalmer]

If your company is billing the client a different rate, then surely it's not a substitution, as its not a direct replacement for your personal service provided through your company (or so it could be argued).

[ASB]

I would imagine that the positive aspects of actual substitution would far outweigh any possible negative connotations by it being billed at a lower rate.

[LisaContractorUmbrella]

You will essentially be supplying clientco with a member of your staff who will be carrying out work for you - if you are paying the sub I can't see that the rate will make an awful lot of difference

[Wanderer]

ClientCo is suggesting I charge lower for the days that only the sub would be onsite as he'll work on on a smaller piece of work and not be familiar with everything about the project.

Tough one. You will want to keep a percentage of what you bill to the client and pay the rest to the subbie so if the client won't pay as much then it's cutting into your profit margins.

Technically you should bill at the normal contracted rate. However, if the client is willing to accept the sub then I wouldn't make waves and would consider billing a lesser amount, at least at first.

[northernladuk]

ClientCo is suggesting I charge lower for the days that only the sub would be onsite as he'll work on on a smaller piece of work and not be familiar with everything about the project.

I'm inclined to agree. But as pointed out in the thread, this does sort of mean that I don't invoice them the contracted rate.
It's like my company billing slightly less for a smaller piece of work but then I'm wondering if this might have other implications that I may not have fully considered...

This sub stuff is great and we never get chance to discuss it but I think the alarm bells are going here.

Your sub well, kind subs you. But in this case he is doing a different piece of work, somewhere client direction has crept in here. Different piece of work, different rate. In the eyes of HMRC this is NOT your sub. It is your client getting a different piece of work done by a different person at a different rate. If not that it is client direction and your contract as you are not honouring rate either.

Interesting one this.

What are you doing while your sub is working YAB?

Is just negotiating an early end to your contract and get one set up with your sub not an option. Sounds like the option I would go for at the moment.