Substitution clause

[monkeyboy]

Is it possible for two contractors working for the same end client , to basically cover for each other for a day. Ie one takes day off the other one bills the first contractor for the day effectively substituting him.

As long as you have written confirmation form the client allowing the substitution .

Would this be considered artifical by HMRC (stupid question of cause it will) but how woulr this look under IR35 .

AN enacted substitution clause

Even better if they just do it on the same day.

I've been asked this but feel that the courts would look at it as a purely artificail arrangement and not proof of a working sub clause?

Plus you have the down side of billing rates

[TheFaQQer]

Doesn't seem worth it, to be honest.

HMRC almost certainly would argue that there hadn't been any actual substitution, so it wouldn't impact your IR35 case positively.

Plus, you need to invoice TheirCo and they invoice YourCo, so you have to pay the VAT that you aren't claiming back...

[The Lone Gunman]

Doesn't seem worth it, to be honest.

HMRC almost certainly would argue that there hadn't been any actual substitution, so it wouldn't impact your IR35 case positively.

Plus, you need to invoice TheirCo and they invoice YourCo, so you have to pay the VAT that you aren't claiming back...

Not sure there. I have asked a similar question.
You have to take into account the reasoning behind the substitution clause as evidence for being in business.
There were a couple of points:
If EDS had the contract then they could send any of their employees to client site was one argument.
Second was that the builder who is doing the work may send someone else on some days.
Neither of these examples requires the billing out to another company, it just requires that someone else turns up to do the work.

I have argued that using a piece of code from another contractor (if I pay them then even better) or presenting a report written by my secretary fulfils a substitution clause.

We will only find out if someone actualy takes this to court.

[Marina]

I have argued that using a piece of code from another contractor (if I pay them then even better) or presenting a report written by my secretary fulfils a substitution clause.

Hey, those sounds quite promising ideas. And there's scope for reciprocal arrangements for the mutual benefit of both contractors.

[The Lone Gunman]

Hey, those sounds quite promising ideas. And there's scope for reciprocal arrangements for the mutual benefit of both contractors.

Yes but a number of others have said that it will take more than this which is why I am not sure.
My stand is that I can prove I didnt do the work therefore I have exercised my right to provide a sub in much the same way a plumber or builder does.
HMRC has so far relied on the reality being that the individual contractor is required to do the work themselves.

[NotAllThere]

So contractor A takes a day off to substitute for contractor B, who's taken a day off to substitute for contractor A.

It'd be more convincing if the clients were different.

[The Lone Gunman]

So contractor A takes a day off to substitute for contractor B, who's taken a day off to substitute for contractor A.

It'd be more convincing if the clients were different.

Thing is that HMRC standpoint has so far been that teh individual contractor is required to do the work personaly. Where as a plumber or a builder can have someone else do it.
Even without a day off, if these two take over each others work, work outside the remit of their own contracts, then they have done what plumbers and builders do and have provided a replacement.

I have been trying to get this one straight for ages and am still not convinced.