Simple fix for IR35 PS Problem

[dickeytt]

Hi All, this is my 1st post on the site, but wanted to see what you think about this way to resolve the PS IR35 issue.

From my understanding the big change is that the end Client (Public Sector) is now responsible for determining if the contractor is in or outside IR35. The 1st point is that you need to work with your client and Agency, all parties need to agree the new way to work.

The major test for a contractor is the "Right of Substitution" this needs to be written in the contract, but also part of the working practices, the client does not have the right of refusal a substitute, but can say what the standard if substitute is provided.

I have agree with my client the following will be put in place.
1) The client will review the IR35 questions (using the QDOS 28 questions) and make sure that they know how to answer and actually answer the questions correctly to prove that the contractor is outside IR35.
2) Imbed a process with the contractor to show how to enact the right of substitution, this process will need to be agree with the contractor and agency, when the contract is signed. It will say that the substitute will need to have a set of standards, so BPSS Approved, Skills similar to the contractor (so I am an experienced PM, so the substitute must be an experienced PM), that the contractor will asses if a substitute is needed and the client has no right to refuse.

Is my understanding correct that if the 2 points are put in place, HMRC will have no grounds to asses that I am inside IR35?

I would like to here your thoughts on these changes.

Thanks

Richard

[cojak]

Hi All, this is my 1st post on the site, but wanted to see what you think about this way to resolve the PS IR35 issue.

From my understanding the big change is that the end Client (Public Sector) is now responsible for determining if the contractor is in or outside IR35. The 1st point is that you need to work with your client and Agency, all parties need to agree the new way to work.

The major test for a contractor is the "Right of Substitution" this needs to be written in the contract, but also part of the working practices, the client does not have the right of refusal a substitute, but can say what the standard if substitute is provided.

I have agree with my client the following will be put in place.
1) The client will review the IR35 questions (using the QDOS 28 questions) and make sure that they know how to answer and actually answer the questions correctly to prove that the contractor is outside IR35.
2) Imbed a process with the contractor to show how to enact the right of substitution, this process will need to be agree with the contractor and agency, when the contract is signed. It will say that the substitute will need to have a set of standards, so BPSS Approved, Skills similar to the contractor (so I am an experienced PM, so the substitute must be an experienced PM), that the contractor will asses if a substitute is needed and the client has no right to refuse.

Is my understanding correct that if the 2 points are put in place, HMRC will have no grounds to asses that I am inside IR35?

I would like to here your thoughts on these changes.

Thanks

Richard

Since the consultancy I work for does not have this dispensation with the clients I work with (I still need to be interviewed by the client before I'm accepted), I can't see the PS being prepared to accept this. Are you going to perform the SC or DBS checks that the PS will often demand?

As far as I'm concerned the RoS criterion has always been bogus, whether for PS or not.

[MrMarkyMark]

Hi All, this is my 1st post on the site, but wanted to see what you think about this way to resolve the PS IR35 issue.

From my understanding the big change is that the end Client (Public Sector) is now responsible for determining if the contractor is in or outside IR35. The 1st point is that you need to work with your client and Agency, all parties need to agree the new way to work.

The major test for a contractor is the "Right of Substitution" this needs to be written in the contract, but also part of the working practices, the client does not have the right of refusal a substitute, but can say what the standard if substitute is provided.

I have agree with my client the following will be put in place.
1) The client will review the IR35 questions (using the QDOS 28 questions) and make sure that they know how to answer and actually answer the questions correctly to prove that the contractor is outside IR35.
2) Imbed a process with the contractor to show how to enact the right of substitution, this process will need to be agree with the contractor and agency, when the contract is signed. It will say that the substitute will need to have a set of standards, so BPSS Approved, Skills similar to the contractor (so I am an experienced PM, so the substitute must be an experienced PM), that the contractor will asses if a substitute is needed and the client has no right to refuse.

Is my understanding correct that if the 2 points are put in place, HMRC will have no grounds to asses that I am inside IR35?

I would like to here your thoughts on these changes.

Thanks

Richard

TLDR;

Suggest you do some reading on the PS IR35 part of the forum.
FWIW, what you are suggesting there won't make a blind bit of difference.

[rob s]

An easier way would be to offer your client to provide, say, a day's on-site trainer in your chosen specialty for the benefit of some nearby permies whose skills need uplifting as part of you delivering the outcome. If you then bill the client for a standard day but send in the trainer for a day and get the trainer to bill you, that would probably be easier than doing an actual like for like substitution and be more palatable for the client but may not be enough of an actual substitution to stand up.

[NotAllThere]

I'm reminded of 1999/2000. Many ideas floated for fixing IR35, but matters didn't become clear for several years... and then became muddy again with the "actual working practices".

[MrMarkyMark]

The area I work in is fairly small specialised product area, so there is a greater likelihood of being able to supply a sub.

Quite often the IB may have used that person before, in any case.

[cojak]

The area I work in is fairly small specialised product area, so there is a greater likelihood of being able to supply a sub.

Quite often the IB may have used that person before, in any case.

I guess I'm cynical because I've never seen the RoS clause actually used.

[MrMarkyMark]

I guess I'm cynical because I've never seen the RoS clause actually used.

And you would be very right in most cases, the situation I'm quoting certainly isn't the norm.

I have been in a situation where a colleague was offered a role about to sign, couldn't do it, so recommended me.
I started a couple of days later.

Very obviously not quite the same, but an illustration it could be possible.

[BoredBloke]

The substitute thing really is a crock. A big company can send a substitute because it employs a number of people, often doing the same role. My company employs 1. If I employed another then yes I'd send that person but I don't. I employed a plumber a bit ago who failed to turn up. It turns out he was ill. His little company didn't pass the job onto another plumber. He didn't get the work either!

[nucastle]

The impetus behind the new rules is to make good on the promise that it will raise 400 million quid.

It's got nothing to do with ensuring contractors carefully word a magic substitution clause that somehow trumps every other aspect of their day to day activties which, from what I've experienced, are tending more and more towards direct SDC.

If you are one of the 90% of contractors that HMRC feels should be inside IR35, then you need to realise the tide is against you.