Using a sub...

[scooby]

Might be looking for a sub, but how do you go about it? Do i sub contract via my company, or is it more hassle than its worth?? should i just put the names forward and walk away?

[northernladuk]

Might be looking for a sub, but how do you go about it? Do i sub contract via my company, or is it more hassle than its worth?? should i just put the names forward and walk away?

Interesting question...

I would have thought from an IR35 perspective you should really provide the guy through your LTD to meet contractual requirements, like the big consultancies do. One guy leaves and another of their throng steps in to the breach. If you do it any other way I would expect HMRC to ask your client if your sub clause was nothing more than words. Also if you agree to just help them backfil and they take the liberty of finding their own contract it could also cast doubt on the sub clause.

IR35 aside for a moment I would put a name forward and walk away. It just isn't worth the hassle of running someone through your LTD, paying them, contracts and so on. Problem is would this satisfy IR35.

Maybe if it is worded properly your are still providing a sub, but wording it such that it is of benefit for the client to engage him and that they agree you have still fulfilled your obligation. Not sure how that would stand up though. If it is just a race between you and client to get a head then I wouldn't call that a substitution.

[scooby]

Interesting question...

I would have thought from an IR35 perspective you should really provide the guy through your LTD to meet contractual requirements, like the big consultancies do. One guy leaves and another of their throng steps in to the breach. If you do it any other way I would expect HMRC to ask your client if your sub clause was nothing more than words. Also if you agree to just help them backfil and they take the liberty of finding their own contract it could also cast doubt on the sub clause.

IR35 aside for a moment I would put a name forward and walk away. It just isn't worth the hassle of running someone through your LTD, paying them, contracts and so on. Problem is would this satisfy IR35.

Maybe if it is worded properly your are still providing a sub, but wording it such that it is of benefit for the client to engage him and that they agree you have still fulfilled your obligation. Not sure how that would stand up though. If it is just a race between you and client to get a head then I wouldn't call that a substitution.

Well put fellow Northern Person. Matches my own thoughts...

[Kate at Qdos]

As per the previous response, I agree in that if you simply put forward some names this could cast doubt on the validity of your right of substitution.

Ideally from an IR35 perspective you should engage the substitute via your own limited company and should be responsible for paying the substitute. Actually providing a substitute would significantly improve the prospects of success in the event of an IR35 enquiry, and would make it much more difficult for HMRC to say that you are caught, so in my opinion it would certainly be worth it.

[kingcook]

Ideally from an IR35 perspective you should engage the substitute via your own limited company and should be responsible for paying the substitute. Actually providing a substitute would significantly improve the prospects of success in the event of an IR35 enquiry, and would make it much more difficult for HMRC to say that you are caught, so in my opinion it would certainly be worth it.

I agree with Kate re: it significantly improving prospects of success in an IR35 case.

However, be careful. If you propose a substitute and the client says no (and they are prepared to wait for you to do whatever it is that you planned on doing).

I'm am going through this right now (there's a bit more detail to it than that, but it covers the main point)

[TestMangler]

I did it once years ago. HisCo Ltd did the work, and invoiced MyCo Ltd. MyCo Ltd invoiced ClientCo Ltd.

Simple as that.