Reply to: Contract Help - IR35

[LondonManc]

I am just looking for the option that the tax man would hate the least!

You're over-thinking it. The tax man would hate you using the substitution clause because that blows his IR35 case out of the water.

[Henrik67]

I did, I still do, and that's not what I said above.

You made it clear the purpose of the clause is a box tick exercise when I told you to do a assessment of your options against realistic scenarios when you would expect to use the clauses.

Decide your attitude to risk and proceed accordingly. There's not much anyone else can tell you. You are running a company not a school tuck shop.

Thanks for your input, much appreciated. It isn't a tick box I either scenario isn't great for me so I don't have a preference from a business perspective, hence looking at it from HMRC view is the deciding factor.

[Henrik67]

I did, I still do, and that's not what I said above.

You made it clear the purpose of the clause is a box tick exercise when I told you to do a assessment of your options against realistic scenarios when you would expect to use the clauses.

Decide your attitude to risk and proceed accordingly. There's not much anyone else can tell you. You are running a company not a school tuck shop.

Thanks for your input, much appreciated.

[ladymuck]

I thought you agreed with the guy earlier that it was a good point to include it? Who knows if I will use it - never say never...

Thanks

I did, I still do, and that's not what I said above.

You made it clear the purpose of the clause is a box tick exercise when I told you to do a assessment of your options against realistic scenarios when you would expect to use the clauses.

Decide your attitude to risk and proceed accordingly. There's not much anyone else can tell you. You are running a company not a school tuck shop.

[GhostofTarbera]

I would not even get a IR35 review, more chance of being hit by lightning than getting investigated in next few years

Depends on your risk approach


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[Henrik67]

The tax man will want to know the likelihood of the claused being used. That is zero by the sounds of it, making me wonder the point of its inclusion if it bears no resemblance to the actual working practices and looks every bit like you're engineering the contract to force an outside assessment.

I thought you agreed with the guy earlier that it was a good point to include it? Who knows if I will use it - never say never...

Thanks

[ladymuck]

I am just looking for the option that the tax man would hate the least!

The tax man will want to know the likelihood of the claused being used. That is zero by the sounds of it, making me wonder the point of its inclusion if it bears no resemblance to the actual working practices and looks every bit like you're engineering the contract to force an outside assessment.

[Henrik67]

I would.

Under what scenarios would you seek to use the clause? Think about how a financial penalty vs a time delay would impact those scenarios.

I am just looking for the option that the tax man would hate the least!

[LondonManc]

Thanks, I thought perhaps having a financial restriction was worse than not having a subs clause but I get your point. QDOS seem to think it is as bad as not having a clean right to SUB.

Having a substitution clause that doesn't look like the standard and that the client have considered, reworded and accepted, if anything, makes it stronger.

[ladymuck]

best leaving as financial then?

I would.

Under what scenarios would you seek to use the clause? Think about how a financial penalty vs a time delay would impact those scenarios.

[Henrik67]

I can see that making it almost unworkable.

best leaving as financial then?

[ladymuck]

They have come back and offered to change the clause to advance notice of 35 days - not sure if this is better or worse ?

I can see that making it almost unworkable.

[Henrik67]

Now they have offered to change clause to days

They have come back and offered to change the clause to advance notice of 35 days - not sure if this is better or worse ?

[northernladuk]

Could you post more rubbish in a single paragraph..

He most certainly can and sadly you can gaurantee he will.

[Henrik67]

So if I understand correctly, the agency doesn't want you to have substitution, but will accept it if there's a penalty.

So why not just accept it with the penalty? That's actually a reasonable request by a client -- yeah, you can send someone else, but we have to security clear him / teach him our protocols / etc. So put it in the contract, then never use the right. You never have to pay the penalty, you never substitute, but the right is there, so you're iron-clad on substitution.

In fact, that makes it look much less like a sham agreement. This is a substitution clause that obviously had some thought put into it.

A contract paid in euros through a Polish agency for a US company is probably not likely to come under HMRC scrutiny anyway. But I don't see the problem with just putting the clause in the contract and never using it.

Thanks, I thought perhaps having a financial restriction was worse than not having a subs clause but I get your point. QDOS seem to think it is as bad as not having a clean right to SUB.