When the client scews the result to put you inside IR35

[malvolio]

now saying that IR35 is only determined by who pays a sub if one is provided.

...which is entirely correct. A substitute is only a substitute if they are working as you under your contract and being paid by you. Anything else is either a replacement or a sub-contractor.

It's a subtle difference but a very important one. You can replace an employee very easily, and you can offset some of their work to another worker equally easily. Neither is a substitution in employment law, which says, put simply, the substitute is a one-for-one replacement for the engaged worker under the same contract and Ts&Cs as the original worker and paid out of the original worker's income.

[LondonManc]

I thought that was the true definition of a proper sub anyway.

Your Co gets paid by the client, YourCo then pays the sub.

+1 for this.

If your paying a builder and he chooses to sub in a plumber because his usual one is not available, would you expect to pay for the substitute? (If you're answering anything other than no, please can I quote for your next piece of building work)

[northernladuk]

+1 and not wanting to be a broken record you'd expect the replacement builder to turn up aware of the job and be able to just pick the tools up and get on with it. Not turn up and spend hours learning what needs to be done.

[DKB]

Thanks for the responses, but my question wasn't what constitutes substitution.

Individual assessments were performed on each contractor, some fell inside, some out. Some of the responses given regarding substitution were 'It's never happened' and 'Can sub but the client pays the person'. This result still put these people outside IR35 according to the tool due to the weightings of the other responses given, ultimately the fact that they are unmanaged, don't work on site etc.

I also understand that the tool doesn't necessarily give a definitive answer.

The frustration experienced is that the goalposts keep changing. The tool has been used as they know nothing about IR35, fine. Now they have a whole load of contractors deemed outside of IR35 using the tool, they have sent an email (an exact copy and paste from the tool) to contractors to answer.

If you answer 'never happened' or 'client pays' within the tool, you're outside of IR35 (according to the tool and depending on what other answers you've given). If you respond this way via email to the question asked, the tool results are forgotten about and only this single question asked by email is taken in to consideration.

For an organisation that has relied on the tool as they know nothing about IR35, it seems a bit odd that they would now take matters in to their own hands and hang everything off of one question. IR35 isn't just about substitution

[DKB]

And there is the bit you aren't getting. The clients aren't fully versed on IR35.

The issue is that hiring managers don't know anything about IR35 so have taken proactive steps to determine contractors employment statuses by using HMRC's tool to assess each person

Well I thought I was pretty clear on that one. The whole point of this thread is that organisations use the tool, don't like the result, make their own decision of what puts somebody in or out and then completely disregard the results from the tool.

I know nothing about Building Regs but wouldn't say the fact a ceiling is made from asbestos is ok just because I'm happy that all the power sockets are the right height off the ground as that's the important bit for me.

I guess they're within their rights to do whatever they want

[malvolio]

Thanks for the responses, but my question wasn't what constitutes substitution.

Individual assessments were performed on each contractor, some fell inside, some out. Some of the responses given regarding substitution were 'It's never happened' and 'Can sub but the client pays the person'. This result still put these people outside IR35 according to the tool due to the weightings of the other responses given, ultimately the fact that they are unmanaged, don't work on site etc.

I also understand that the tool doesn't necessarily give a definitive answer.

The frustration experienced is that the goalposts keep changing. The tool has been used as they know nothing about IR35, fine. Now they have a whole load of contractors deemed outside of IR35 using the tool, they have sent an email (an exact copy and paste from the tool) to contractors to answer.

If you answer 'never happened' or 'client pays' within the tool, you're outside of IR35 (according to the tool and depending on what other answers you've given). If you respond this way via email to the question asked, the tool results are forgotten about and only this single question asked by email is taken in to consideration.

For an organisation that has relied on the tool as they know nothing about IR35, it seems a bit odd that they would now take matters in to their own hands and hang everything off of one question. IR35 isn't just about substitution

No but it's a pretty conclusive indicator (in HMRC's eyes at least) since an employee cannot have this option.

Anyway I read your question as being challenging their definition of substitution, which they have got right. The point of the tool is that you don't know about IR35 and so need guidance to help you make the decision. The bolded bit is wrong - someone has got that backwards.

[LondonManc]

Thanks for the responses, but my question wasn't what constitutes substitution.

Individual assessments were performed on each contractor, some fell inside, some out. Some of the responses given regarding substitution were 'It's never happened' and 'Can sub but the client pays the person'. This result still put these people outside IR35 according to the tool due to the weightings of the other responses given, ultimately the fact that they are unmanaged, don't work on site etc.

I also understand that the tool doesn't necessarily give a definitive answer.

The frustration experienced is that the goalposts keep changing. The tool has been used as they know nothing about IR35, fine. Now they have a whole load of contractors deemed outside of IR35 using the tool, they have sent an email (an exact copy and paste from the tool) to contractors to answer.

If you answer 'never happened' or 'client pays' within the tool, you're outside of IR35 (according to the tool and depending on what other answers you've given). If you respond this way via email to the question asked, the tool results are forgotten about and only this single question asked by email is taken in to consideration.

For an organisation that has relied on the tool as they know nothing about IR35, it seems a bit odd that they would now take matters in to their own hands and hang everything off of one question. IR35 isn't just about substitution

That contradicts what you put earlier, doesn't it?

[DKB]

No but it's a pretty conclusive indicator (in HMRC's eyes at least) since an employee cannot have this option.

Anyway I read your question as being challenging their definition of substitution, which they have got right. The point of the tool is that you don't know about IR35 and so need guidance to help you make the decision. The bolded bit is wrong - someone has got that backwards.

I'd agree with that, it certainly shows a clear separation between contract and employee.

When you answer the questions, you can say you're the worker, limited company, not an office holder, you've never used a sub, the client would accept a sub, the client pays the sub, the person works how they want and from where etc etc etc and it still puts you outside IR35 and to be treated as self-employed.

[WordIsBond]

For an organisation that has relied on the tool as they know nothing about IR35, it seems a bit odd that they would now take matters in to their own hands and hang everything off of one question. IR35 isn't just about substitution

I honestly don't get what your problem is here.

This client is willing to give you an outside determination if you say that you would pay a sub if you brought one in. They'd pay you, you'd pay the sub. Why would you not just jump at that, get your outside determination, and move forward?

Were you planning on bringing in a sub and asking them to pay him? If so, why? If not, then who cares if they are covering their backsides in this way?

I don't get it. We're seeing people where the client has declared everyone inside, where the client is clueless, where the client still doesn't know what they are doing. You have this nice client who is asking you to sign a probably pointless statement and they'll declare you outside. Just do it.

[northernladuk]

Haters gonna hate.