Reply to: Invoking Substitution Clause

[MPwannadecentincome]

Correct but they are getting smart (arguable) about deciding with that right genuinely exists...

This is an interesting article that explains why RoS isn't very strong. HMRC take the line most are unrealistic, particularly if an agent is involved... and to be fair they are probably right.

IT contractors warned on IR35 substitution clauses :: Contractor UK

Which is off the back of some a failed case of 20 people where the RoS was deemed a sham which was a key point of the loss.

Sham contracts: Contractors were disguised employees, says appeal court :: Contractor UK

They are not contractors as we we are though. I am not sure a load of people valeting cars really reflects our situation. Interesting non the less.

This is back from 2009 so it's bit odd we still push RoS as one of the main three we need yet Kate C makes the point that RoS isn't that important.

thanks for the links which I will digest :-)

In the meantime I found this on HMRC website Considering the evidence: ineffective or sham substitution clauses

However, the fact that a substitution clause is ineffective or a sham is merely an indicator that personal service is required. At best this would, as stated above, only be considered to be a minor pointer to employment.

[MrMarkyMark]

Bought a lot of people in myself, got a new one in a month or two ago, now.
Clients have always been quite happy for me to do this.

They know I wouldn't bring in anyone that isn't good, as they know I don't suffer fools gladly.

I know a number of people doing the same thing all in IB, where everyone says you wouldn't be able to sub people in.
However, it should be noted, these are proven experts in their field, often industry known.

[northernladuk]

I suspect that is because most contractors don't even try it . I have no idea why..

Because most contractors don't know what they are doing.

[fidot]

I too have substituted and sub-contracted work, but agree that it probably isn't that common. I suspect that is because most contractors don't even try it . I have no idea why.

The thing I don't quite understand about clients who say that they won't accept a substitute (or contractors who think that they clients won't) is that:-

If the original contractor doesn't accept a renewal or had rejected the gig at interview time, what would the client do? They would get somebody else in - the project wouldn't stop. In other words, they would accept a substitute. So, the issue is really whether they are happy with the substitutes put forward by the encumbent.

Generally speaking, when interviewing, clients are looking for what they consider the best available person at the price who meets the minimum criteria. The proposed subbie may even be better than the original.


Where there are credit and security checks to be made, i accept that it may not be worth the while for covering a couple of weeks break.

[Danglekt]

I have done it, I subbed in a contractor with legal knowledge around some docs the programme required - it was timed at the same time as I wanted some time off, so I offered it as a way for them to get what they needed without any increase in costs.

They agreed, work got done, they were happy, I was happy, other contractor was happy and as a lovely side effect I have a pretty cast iron IR35 get out for that gig now.

[northernladuk]

I don't think HMRC and QDOS take this view, it is not whether you have excercised the right that counts, it is whether the right genuinely exists.

Correct but they are getting smart (arguable) about deciding with that right genuinely exists...

This is an interesting article that explains why RoS isn't very strong. HMRC take the line most are unrealistic, particularly if an agent is involved... and to be fair they are probably right.

IT contractors warned on IR35 substitution clauses :: Contractor UK

Which is off the back of some a failed case of 20 people where the RoS was deemed a sham which was a key point of the loss.

Sham contracts: Contractors were disguised employees, says appeal court :: Contractor UK

They are not contractors as we we are though. I am not sure a load of people valeting cars really reflects our situation. Interesting non the less.

This is back from 2009 so it's bit odd we still push RoS as one of the main three we need yet Kate C makes the point that RoS isn't that important.

[SueEllen]

Sorry you lost me completely on the 2nd sentence!?

Generally if one clause in a contract is found not to be enforceable the offended party is suppose to ignore it if it has no impact how they carry out their services.

However if that clause makes it impossible to carry out the contract e.g. as the offended party views it as a breach of trust, you can argue the contract is in dispute and both parties can agree to terminate the contract.

[MPwannadecentincome]

Most contractors don't exercise the right to substitution so it relies on the other tests.

I don't think HMRC and QDOS take this view, it is not whether you have excercised the right that counts, it is whether the right genuinely exists.

Oh and either of the parties can terminate the contract on that breach. In your case you simply point out you don't know which other clauses in the contract may be a sham.

Sorry you lost me completely on the 2nd sentence!?

[SueEllen]

Thanks for the info in this thread, just what I needed for my research in finding a sub to cover 2 critical days in January before I fly back from my first vacation abroad in more than 10 years. Now I just need to find that sub and skill 'em up!

But this looks worrying, as I understand it if the right to substitution is not genuine it is an IR35 fail.... so most of y'all should be in IR35 by the logic given here....

Most contractors don't exercise the right to substitution so it relies on the other tests.

Oh and either of the parties can terminate the contract on that breach. In your case you simply point out you don't know which other clauses in the contract may be a sham.

[MPwannadecentincome]

Thanks for the info in this thread, just what I needed for my research in finding a sub to cover 2 critical days in January before I fly back from my first vacation abroad in more than 10 years. Now I just need to find that sub and skill 'em up!

But this looks worrying, as I understand it if the right to substitution is not genuine it is an IR35 fail.... so most of y'all should be in IR35 by the logic given here....

I'm with PC on this one. It might be in most of our contracts, but I've never met anyone who has used a subby clause.

A couple of folk on here have, but I suspect they are in a very small minority. I suspect {some large percentage} of clients would simply not let you do this regardless of your contract.

And by "not let you", they'd say "No you can't do that, and if you don't like it, we will terminate your contract".

[tomtomagain]

As a hiring manager, I'd definitely have allowed it.

You go to the client, you say that you are planning to be off for x weeks, but you'll bring someone else in to do your job for you while you're away, with a handover period. "It won't cost you a penny more". Then see what happens.

Agreed. As a hiring manager ( in a previous life ) I would have accepted it. BUT only if presented correctly.

If a "sub" just turned up on Monday morning and expected to start work then it would not have ended well for the sub or the contractor.

[NotAllThere]

Funny how people react "Oh no, you can't do that, client wouldn't wear it". Utter twaddle. Or you've only ever worked for completely up themselves, unreasonable customers. As a hiring manager, I'd definitely have allowed it.

You go to the client, you say that you are planning to be off for x weeks, but you'll bring someone else in to do your job for you while you're away, with a handover period. "It won't cost you a penny more". Then see what happens.

[SueEllen]

Support environment and sending in a sub? Good luck with that one.

Might be in the contract but a lot of clients would be horrified at the thought of paying someone else.

The mistake you consistently make is presuming that all companies are the same.

[v8gaz]

Eh.. Why did I get a mention when you quoted someone else?

Three reasons:

1. I am old
2. I was tired
3. It's always nice to meet you NLUK

[northernladuk]

Pleased to meet you NLUK - I have. Got a mate in for a week, we split the invoice as he got up to speed, then I got out of there and he ran the contract to the end. (personal reasons to move on)

Client was perfectly happy, and it all ended well.

Eh.. Why did I get a mention when you quoted someone else?