Reply to: Trying to arrange a substitute

[Butcheroo]

Trying to arrange a substitute

I'm starting to think of ir35 as an impossible to predict or cover yourself for entity. You just keep working hoping you never get investigated.

Every contract I have ever had have broken the rules in one way or another when i actually work there regardless of contract terms

This can be from shifting to different projects, once I got asked to check everyone else's calendar to get leave approved. I once got given a business card which I refused to hand out. I've been named in org charts etc. one company even gave me a phone which I hid.

Problem is would they mention all this in court to stitch me up.

Should you walk our when a boss starts not playing by the rules you expect ?

Sometimes I wonder if this is all worth it

[northernladuk]

Suddenly renting an office could be construed as either a Sham due to points on business entity test or you have outgrown your home office which is what I will say. When ir35 first cane out everyone had their contracts rewritten which could have been seen as either a scam or just a change In The way you work

If I start renting an office now it does not mean its just to look better. That's what I will say and I will use the office as well.

Fill your boots but read this rather than listen to me...

Will renting an office reduce my IR35 risk? :: Contractor UK

No point manipulating the test

However, there is absolutely no point in manipulating the business entity tests and certainly no point in getting into “the lower end of medium risk”. IR35 is all about “relevant engagements” so if you have a contract for 4 days a week which does not require you to use your own premises, then having business premises is worthless in the IR35 debate on that particular contract.

Breach of director’s duties?

It is also worth remembering that you have duties as a director, which entail ensuring value for money and justifying the spending of company funds. If a faster broadband connection is necessary and only achievable by renting premises and you do actually meet clients at these premises then fine, but it may be difficult to justify (the cost) solely for the purposes of meeting some HMRC risk of investigation tests.

“Keep calm and contract on”, IR35 experts tell contractors following HMRC’s new tests

“However, there is a trap, in that if the contractor is clearly not using that space, then the cost is not being incurred wholly and exclusively for business purposes, so the contractor’s limited company would not enjoy corporation tax relief. HMRC would spot this in the corporation tax return, and the truth would emerge that the office rental was a sham.”

“There is no point in contractors trying to manipulate the tests and there will be no point in trying to delay providing documents if investigated,” adds Cottrell. “HMRC will use its powers to conduct the investigation as quickly as possible.”

Enjoy wasting your money....

[Butcheroo]

Trying to arrange a substitute

I just can't see the point of this. If that contractor is unavailble due to him having another contract it just won't work. It also doesn't mean you can use him as your sub clause will need your client to meet him. To have a valid named sub in a contract you need to have had him vetted by the client else it's just rubbish surely. Think about all these 'tricks' from HMRC's point of view. How easy will it to be to prove it's a sham. In this, the office and all the other manufactured situations it will be a peace of piss.

Suddenly renting an office could be construed as either a Sham due to points on business entity test or you have outgrown your home office which is what I will say. When ir35 first cane out everyone had their contracts rewritten which could have been seen as either a scam or just a change In The way you work

If I start renting an office now it does not mean its just to look better. That's what I will say and I will use the office as well.

[Butcheroo]

Trying to arrange a substitute

Yes in a perfect world we would never be asked to do a client timesheet, we would only work on one named project, we would never be on any org chart, never eat in their canteen, never have to "ask"/"check" to get leave and never be told what office to sit in most days or when we can work from home and use out own laptops all the time.

Problem is finding a client that does all that. I'm my experience each client screws you up on at least two of the above.

[MyUserName]

That means next to nothing in the context of IR35 though. All of us on here would say the same. There's nothing in your statement above that sets this guy apart from any other 'average' contractor, TBH.

Actually at that point I wandered off into musing territory.

Anyway, the reason he has always struck me as out of IR35 is because of the project setup. It was one project that needed doing and that was it, when the bid was put forward and his software was used he was out. There was no one else in the company with his skills so he was not really a part of a team, unless you count him as a team of one. He answered to a moderately technical manager but mainly controlled the code base himself as no one would really understand it anyway.

Well, not until us Industrial Trainees got there and started to work on the project. Ah ... how he hated that as it eroded his power base. He also hated how fast we picked up programming as it made him feel old and he could not bang on so much about how awesome he was.

[Butcheroo]

Trying to arrange a substitute

Great, another touchy newbie. You should fit in fine around here

Ha thanks

[captainham]

I have only met one programming contractor who I honestly believe was IR35 clear. He had no subsititute clause etc but it was in a managerial company and they wanted some software written for a bid so he was brought in to write it and then leave. He had the same pass as me, sat with me - worked on technical aspects with one quite technical manager. However, he simply was not a part of the company and had no interest in even becoming so.

Every other programmer I have worked with or met could be intrepreted as a disguised employee as, day to day, there was really little difference between them and the permies and the differences that existed often did not really matter e.g. filling out a timesheet.

That means next to nothing in the context of IR35 though. All of us on here would say the same. There's nothing in your statement above that sets this guy apart from any other 'average' contractor, TBH.

[d000hg]

No this is my 8th year

Don't play the high and mighty card

Great, another touchy newbie. You should fit in fine around here

[MyUserName]

The issue is that most 1 man bands in the business world can be seen as either hidden employees or as businesses depending on what aspects you stress.

I have only met one programming contractor who I honestly believe was IR35 clear. He had no subsititute clause etc but it was in a managerial company and they wanted some software written for a bid so he was brought in to write it and then leave. He had the same pass as me, sat with me - worked on technical aspects with one quite technical manager. However, he simply was not a part of the company and had no interest in even becoming so.

Every other programmer I have worked with or met could be intrepreted as a disguised employee as, day to day, there was really little difference between them and the permies and the differences that existed often did not really matter e.g. filling out a timesheet.

[northernladuk]

No this is my 8th year

Don't play the high and mighty card

Am just making an assumption from what you posts.

[Butcheroo]

Trying to arrange a substitute

I take it you are new to contacting??

A permy can change employers every few months. The fact he choses not to is irrelavant. Your grasp on business and been able to see the greater picture is pretty poor to be honest and is the root of your problems, not IR35 of HMRC.

No this is my 8th year

Don't play the high and mighty card

[northernladuk]

Fair enough

Your point of stop trying to look like a business just be one, is the whole game we are all playing now

We can't be hidden employees as we have no employee rights and I personally change client every few months, what permy does that

Even if we think we are a business and have ir35 proof contract terms we are still vulnerable so are looking for helping hands even if they are forced changes to look better

I will do anything to avoid this mad witch hunt.

I take it you are new to contacting??

A permy can change employers every few months. The fact he choses not to is irrelavant. Your grasp on business and been able to see the greater picture is pretty poor to be honest and is the root of your problems, not IR35 of HMRC.

[Butcheroo]

Trying to arrange a substitute

You are quoting a tiny paragraph from what probably was a very complex investigation based on a whole host of points and haven't even named the case. There is no silver bullet for IR35. No one element can put you in and no one element can put you out. I do not believe that him having a named sub was the one thing that won him this case. You are missing a whole load of context and quoting one line which is incredibly misleading. You are quoting lines, not HMRC case law.

Fair enough

Your point of stop trying to look like a business just be one, is the whole game we are all playing now

We can't be hidden employees as we have no employee rights and I personally change client every few months, what permy does that

Even if we think we are a business and have ir35 proof contract terms we are still vulnerable so are looking for helping hands even if they are forced changes to look better

I will do anything to avoid this mad witch hunt.

[captainham]

But on HMRCs own ir35 example one of them specifically says a guy passed as he has named agreed subs but never used them. Just quoting hmrc examples fella

Yes but the client has already agreed this, and the named sub:

"The end client accepts that H Ltd is free to send someone to take Hamish’s place."

If you can get that in a contract, great, but in reality I don't think many clients will accept that, unless you already have a very good relationship with them.

Edit: Context

‘Hamish’ – reasons why IR35 does not apply
Personal service
Even though H Ltd has not sent a substitute, it is clear that there is no need
for Hamish to provide personal service. The end client will accept a substitute,
and H Ltd has named two suitable substitutes.
IR35 cannot apply unless the end client needs the worker’s personal service.
That is clearly not the case here. This is a clinching argument that IR35 does
not apply.

Other factors
H Ltd spends a lot of money on providing and maintaining the equipment
needed for the work. H Ltd thus incurs financial risk. This is a strong pointer
that IR35 does not apply.

[northernladuk]

But on HMRCs own ir35 example one of them specifically says a guy passed as he has named agreed subs but never used them. Just quoting hmrc examples fella

You are quoting a tiny paragraph from what probably was a very complex investigation based on a whole host of points and haven't even named the case. There is no silver bullet for IR35. No one element can put you in and no one element can put you out. I do not believe that him having a named sub was the one thing that won him this case. You are missing a whole load of context and quoting one line which is incredibly misleading. You are quoting lines, not HMRC case law.