Reply to: Simple fix for IR35 PS Problem

[RonBW]

You just reminded me I know a few more people who either employed, employ or sub-contracted people through their contracting firms and so can (or did) substitute people.

In some cases it was an accident like my own case, while in others it's purposely done. In all cases it is not due to a tick box.

I brought in a friend to do the testing part of the development for me because it was part of my role that I hate, he's better at it than I am, and he's cheaper - so while still charging the client my full whack I could make money and get someone better to do that bit of the project for me. Client was happy for me to do that.

I've also had other colleagues do the mundane work for me where the client hasn't even been aware that I have brought someone else in to do the work - they pay my company to deliver and as long as someone competent is delivering and my company is responsible for that, they have no need to get involved in the details.

I don't employ any of these people, but I have brought them in to do the work on behalf of my company.

[eek]

The claim from HMRC is that only 10% of those who are inside are declaring themselves as such. Not that 90% are inside.

Yep and elsewhere most estimates I've seen say that 40-60% of contractors probably should be inside. And given that at my last place 80% were (I knew of 10 only me and 1 other were in anyway outside) I would say that's probably about right...

[Mordac]

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".

Yes, I was getting that "Groundhog Day" feeling as well...

[teapot418]

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.

The claim from HMRC is that only 10% of those who are inside are declaring themselves as such. Not that 90% are inside.

[northernladuk]

That's the crux of the problem, you did everything else successfully getting the agreement for a ROS, but to keep it legal and above board was too difficult

Yup but I've kept all the evidence so in my mind RoS was carried out, the actually process within the client should be irrelevant. I am sure HMRC won't agree but the spirit was there. Who knows.

[MrMarkyMark]

I have to agree but I got very close in the PS gig I left recently. I sourced a replacement, got them to meet the client but in the meantime had a bit of mare with the paperwork. It was just too much of a pain in the arse. In the end I just kept all the documentation of the event and agreed it was just easier to stick them through the agent instead. Close but no banana.

As soon as you see a title saying 'Simple fix for IR35' you've got to know the answer is 'its not going to work' before you've opened the thread

That's the crux of the problem, you did everything else successfully getting the agreement for a ROS, but to keep it legal and above board was too difficult

[northernladuk]

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.

I have to agree but I got very close in the PS gig I left recently. I sourced a replacement, got them to meet the client but in the meantime had a bit of mare with the paperwork. It was just too much of a pain in the arse. In the end I just kept all the documentation of the event and agreed it was just easier to stick them through the agent instead. Close but no banana.

As soon as you see a title saying 'Simple fix for IR35' you've got to know the answer is 'its not going to work' before you've opened the thread

[SueEllen]

You just reminded me I know a few more people who either employed, employ or sub-contracted people through their contracting firms and so can (or did) substitute people.

In some cases it was an accident like my own case, while in others it's purposely done. In all cases it is not due to a tick box.

[SueEllen]

And in all those cases the people were working as businesses with long term substitution plans rather than using them to tick a box... They are definitely exceptions rather than the rule...

The two unrelated contractors it was just because of chance. They realised they could help each other and stop their projects grinding to a halt if they went on holiday.

With the related individuals it was because they set up their businesses that way.

I actually had people I could substitute to until recently, and actually used them on one project I did years ago. One actually helped me on another project but decided due to the small amount of time taken not to bill me. In all cases the client was aware.

[eek]

I have though.

In one case 2 contractors both working part-time for my client and then other clients would substitute for each other. It resulting in one getting work from one of the other clients when the other one was unable to fit that project in.

Then I have seen a husband and wife team, and two brothers substitute for each other. In both these cases the clients only needed one body on-site. The brothers were background checked.

The husband and wife were project managers, and some of the more technical staff preferred the wife.

And in all those cases the people were working as businesses with long term substitution plans rather than using them to tick a box... They are definitely exceptions rather than the rule...

[SueEllen]

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

I have though.

In one case 2 contractors both working part-time for my client and then other clients would substitute for each other. It resulting in one getting work from one of the other clients when the other one was unable to fit that project in.

Then I have seen a husband and wife team, and two brothers substitute for each other. In both these cases the clients only needed one body on-site. The brothers were background checked.

The husband and wife were project managers, and some of the more technical staff preferred the wife.

[eek]

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

+1. The thing I hate about contracting is that we have to pretend to be replaceable/substitutable to remain outside IR35 whilst we sell our specialist skillset which is very hard to find in the open market... Hence we have clauses that everyone knows can't be used but are there to satisfy a tickbox exercise.

One reason why I actually like the Pubic sector changes is that they can determine what they want. If the client wants me (and that means explicitly confirming that there will be no supervision, direction nor control - heck have you tried to control me) then I can finally bin that substitution clause that I could hardly ever use...

[LondonManc]

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.

Perhaps HMRC should be asking more pertinent questions, like why Government departments are avoiding all the business NICs to begin with. Not going to happen, though, so hit those that can't fight back. While you claim 90%, I reckon they'd settle at 60% being inside.

[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.

[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!