Just read the article on Contractor Weekly below...
IR35: Ignorance of Substitution Alters Nothing - Contractor Weekly
We had a discussion about this recently and it got very complicated with a big mix up between substitution and subcontract and comments about letting someone else doing work for the client but not telling the client would prove the contractor has substituted. In reality he as actually subcontracted some of the work so it is different.
The interesting thing in the article is that UK Mail defines a process the substitute would have to go through to be considered and it is more or less a full application which included
This person would then be considered a substitue (subcontractor) for the client and for HMRC to consider it.
I think this makes it pretty clear what consititutes substitution rather than subcontract a bit of the work out, which to be fair is in itself is a good pointer, if done correctly. But still, if you want to say you have used your RoS you need to be aware what the client considers a substitute before you can prove it to HMRC. It also makes me think this idea of naming a sub is pointless as it is just a paper exercise and to be proven the steps required by the client would have be followed...
Interested to hear anyone elses opinions or take on the article.
IR35: Ignorance of Substitution Alters Nothing - Contractor Weekly
We had a discussion about this recently and it got very complicated with a big mix up between substitution and subcontract and comments about letting someone else doing work for the client but not telling the client would prove the contractor has substituted. In reality he as actually subcontracted some of the work so it is different.
The interesting thing in the article is that UK Mail defines a process the substitute would have to go through to be considered and it is more or less a full application which included
The completion of an application form.
Proof of the individual’s right to take up paid employment within the UK.
Proof of identification and residence.
Completion of a security declaration form.
Receipt of a Scottish basic disclosure.
Five years work [sic] history without gaps.
Five years work [sic] references.
Character references taken up orally and in writing, each covering a two year period within the previous period.
The ‘subcontractor’ was then required to declare in writing that he or she and their employees, agents or subcontractors had satisfactorily passed screening and vetting in accordance either with the Respondent’s procedure or one that they had developed which was their equivalent.
Proof of the individual’s right to take up paid employment within the UK.
Proof of identification and residence.
Completion of a security declaration form.
Receipt of a Scottish basic disclosure.
Five years work [sic] history without gaps.
Five years work [sic] references.
Character references taken up orally and in writing, each covering a two year period within the previous period.
The ‘subcontractor’ was then required to declare in writing that he or she and their employees, agents or subcontractors had satisfactorily passed screening and vetting in accordance either with the Respondent’s procedure or one that they had developed which was their equivalent.
I think this makes it pretty clear what consititutes substitution rather than subcontract a bit of the work out, which to be fair is in itself is a good pointer, if done correctly. But still, if you want to say you have used your RoS you need to be aware what the client considers a substitute before you can prove it to HMRC. It also makes me think this idea of naming a sub is pointless as it is just a paper exercise and to be proven the steps required by the client would have be followed...
Interested to hear anyone elses opinions or take on the article.
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