Irate Public sector client's manager sends e-mail rejecting Substitutions

[northernladuk]

Oh I wasn't aware of that, I thought no ROS = automatic fail.

It isn't going to help that is for sure but if you can prove that you work in an environment that RoS is just not feasible or allowed to anyone with a solid reason they can't pin you against a wall for not having in the contract really. Not really something I would like to fall back on to be honest though.

[LisaContractorUmbrella]

I should think that these days any contractor worth their salt will have an IR35-proof contract as standard, hence the reason HMRC go for working practices, making the contract rather a useless defence.

I think RasputinDude summed up my feelings already. I don't trust HMRC and I would rather stay off of their radar. I think depending on how much they want to dig, they could get most people "caught". The easy one is the oft-discussed Right of Substitution. If HMRC asks the client if they would REALLY accept a substitute, I believe the majority would answer no.

So I will try make my defence as robust as possible, cross my fingers and not work in the public sector anymore.

But that's kind of the point I was making - a contract can be written to say anything you like and could be used as an IR35 defence by someone working alongside permies on a help desk earning £10 per hour and because it reached a point when ALL contracts were written to be outside IR35 HMR&C went another route.

I agree totally that HMR&C have handled IR35 incredibly badly - keeping up with their opinions on most things is a full time job but, the fact is, they are the ones that will take you to a tribunal that will cost you to defend and for which, win or lose, you will have no costs reimbursed. Common sense tells most long term contractors how to operate as a true business but many, many newbies think their bullet proof contracts will cover their backsides in the event of an investigation. HMR&C (once they've caught up) must see this as a bit of a p**ss take and so respond.

Just MHO

[RasputinDude]

the fact is, they are the ones that will take you to a tribunal that will cost you to defend and for which, win or lose, you will have no costs reimbursed

This is the issue. Many of us are members of the PCG or have insurance from other providers that covers the cost of legal defence in the case of an investigation. However, as I understand it, if we submit to this new regime or request a review from HMRC then that insurance is invalidated. So we are left to foot the cost of proving to HMRC that we really are businesses. Far easier and much less worry and stress to just walk.

The cost of fighting HMRC to prove what we already know is just too high and as I said - we don't trust HMRC to be objective.

[Wanderer]

I thought no ROS = automatic fail.

Not having a RoS does not equal an automatic fail, but then again the existence or otherwise of a RoS is a pretty weak pointer unless you actually USE your RoS.

If you don't pass the RoS test then there are other points to consider. See HMRC's guidance to see what's important and what's not.

[Rabotnik]

Not having a RoS does not equal an automatic fail, but then again the existence or otherwise of a RoS is a pretty weak pointer unless you actually USE your RoS.

If you don't pass the RoS test then there are other points to consider. See HMRC's guidance to see what's important and what's not.

Cheers, I thought it was the mark of death, partly due to this article I read some time ago which I probably misinterpreted: alarming-substitution-ruling

[supersteamer]

IR35 caught isn't a failure - providing a temporary employee is a service you can provide just like any other. It just comes with higher overheads which you need to pass on ....

Dear Mr Manager,
Thank you for your recent email. I am delighted to hear that you are sufficiently pleased by the work of MyCo's current representative that you henceforth wish only her to work on contract (#123) until the end of it's term. In order to meet your requirements I have enclosed an amendment to our existing contract which deletes the previously agreed right of substitution and names our representative at your site. This amendment is chargeable at an additional £££ per day due to higher costs to MyCo as increased tax is due for provision of a personalised service. I have also amended the contract to reflect this change in price.
I trust that these changes meet with your satisfaction.
Inc.

[Lewis]

However, as I understand it, if we submit to this new regime or request a review from HMRC then that insurance is invalidated.

What makes you think this? I have PCG, don't work in public sector mind, but I wasn't aware of any "strings" being attached. Have you got any links where it says this?

[RasputinDude]

What makes you think this? I have PCG, don't work in public sector mind, but I wasn't aware of any "strings" being attached. Have you got any links where it says this?

I think that I saw it in discussion somewhere on the old forum. I'll try to find a quote.

---edit----
Can't find anything on the forum right now. Until I do please don't take my understanding on insurance invalidation as gospel and check with your own provider.

(Rare though it is, I have been known to to be wrong before and I wouldn't like to give bad advice on such an important topic)

[bobspud]

But that's kind of the point I was making - a contract can be written to say anything you like and could be used as an IR35 defence by someone working alongside permies on a help desk earning £10 per hour and because it reached a point when ALL contracts were written to be outside IR35 HMR&C went another route.

I agree totally that HMR&C have handled IR35 incredibly badly - keeping up with their opinions on most things is a full time job but, the fact is, they are the ones that will take you to a tribunal that will cost you to defend and for which, win or lose, you will have no costs reimbursed. Common sense tells most long term contractors how to operate as a true business but many, many newbies think their bullet proof contracts will cover their backsides in the event of an investigation. HMR&C (once they've caught up) must see this as a bit of a p**ss take and so respond.

Just MHO

I agre and for many years have said that none project based work should never be sold as feasible to be outside IR35.

That said many umbrellas have made a living telling the gullible that they can improve returns by providing expenses against dispensations from HMRC this leaves many people with a ticking time bomb when hector turns up looking for the 1300 worth of coffee receipts the they didn't think they needed...

[LisaContractorUmbrella]

I agre and for many years have said that none project based work should never be sold as feasible to be outside IR35.

That said many umbrellas have made a living telling the gullible that they can improve returns by providing expenses against dispensations from HMRC this leaves many people with a ticking time bomb when hector turns up looking for the 1300 worth of coffee receipts the they didn't think they needed...

Couldn't agree more - this is why this is such a great site and the reason I probably spend more time than I should on it - it's main purpose is to educate newbies so they know the good from the bad - by doing that we may eventually find that HMR&C will move on and pick on another industry