Right of substitution - IR35 status

[TheFaQQer]

Is there no way the agency will agree to change the clause? You'd just need to remove 'and this is approved in writing by the Client', which isn't a huge amendment. The rest of the clause is absolutely fine.

Don't call the Revenue.

What about adding "Such approval shall not be reasonably withheld" instead of removing it?

[Qdos Contractor]

What about adding "Such approval shall not be reasonably withheld" instead of removing it?

That's also fine, although the 'qualifications, skills and experience' criteria should be enough really.

[tim123]

Is there no way the agency will agree to change the clause? You'd just need to remove 'and this is approved in writing by the Client', which isn't a huge amendment. The rest of the clause is absolutely fine.
.

It would surprise me greatly if the client were prepared to accept such a change.

[MARTYN]

Believe that the PCG are supporting an appeal of this decision, it will be an interesting one as it seems to be inconsistent with previous rulings.

http://www.shout99.com/contractors/s...le.pl?id=48586

Commissioners

# Dragonfly Consulting Ltd

Jon Bessell was the director of, and owner of 50 per cent of the shares of Dragonfly Consulting Ltd. Operating through an agency, he provided his services from April 2000 to January 2003 to the AA as an IT system tester.

He provided his own training, provided some of this own equipment, including his own chair to assist with back problems, had another smaller client, did not receive sick pay from his client and had a different entry pass to employees.

Employees of AA gave evidence as to the nature of the working arrangements. Though substitutes had been used in the past (by others) and there was a letter to Mr Bessell saying that the Appellant (Mr Bessell"will vet and supply a suitable substitute for the assigned consultant. [The Appellant] will manage the selection process with input from the assigned consultant. Any training costs … would be … at [the Appellant's] expense.", other members of staff confirmed that AA would wish to vet a substitute and would be 'unhappy' if a substitute turned up unannounced and unforeshadowed.

The Commissioner agreed that the 'very limited right of substitution is not inconsistent with employment and does not point strongly away from it'.

Special Commissioner, Charles Hellier concluded:"Overall I find nothing which points strongly to the conclusion that Mr Bessell would have been in business on his own account; by contrast when I stand back and look at the overall picture I see someone who worked fairly regular hours during each engagement, who worked on parts of a project which were allocated to him as part of the AA's teams, who was integrated into the AA's business, and who had a role similar to that of a professional employee. Mr Bessell did not get paid for, or go to work to provide, a specific product; instead he provided his services to the AA to be used by them in testing the parts of a project which from time to time were allocated to him. He was engaged in relation to the work to be done on a specific project but not to deliver anything other than his services in providing testing in relation to that project. In my opinion he would have been an employee had he been directly engaged by the AA."

The outstanding PAYE and NI amounted to £99,000.

[tim123]

Believe that the PCG are supporting an appeal of this decision, it will be an interesting one as it seems to be inconsistent with previous rulings.

http://www.shout99.com/contractors/s...le.pl?id=48586

Commissioners

# Dragonfly Consulting Ltd

I don't agree (that it is inconsistant).

The judge made a finding of fact that the substitution clause was very weak. As a finding of fact he doesn't have to follow any precidence at all here.

And then he made a ruling of (I think) mixed fact and law that the combination of:

1) a very weak subs clause,
2) very very little work for other clients (one day in 4 years IIRC),
3) a very small amount spent on a training course (a few hundred pounds),
4) a very large amount of Direction and Control from the client (including large chunks of MOO).

pointed to employment.

Where's the inconsistancy?

What's inconsistant IMHO, is the quantity of each of (1) - (4) in the press release, compared to that which is in the actual case. You can talk up your non-IR35 pointers as much as you like, but if they aren't really significant amounts, the judge IS going to ignore them.

tim