Reply to: Substitution???

[elsergiovolador]

This guidance - https://s3-eu-west-2.amazonaws.com/t...0-Apr-2021.pdf

[Paralytic]

Another one I like is the one that says when you build a project that integrates with client other systems, then that automatically means you work under direction. The same if the client has any standards that projects need to adhere to, e.g. 12 factor.

What says that?

[elsergiovolador]

A sub for 6 days? Really?

I know, crazy. It seems like the rules are created so that they can say it doesn't affect freelancers, but in reality it makes running a company that provides services next to impossible.

Another one I like is the one that says when you build a project that integrates with client other systems, then that automatically means you work under direction. The same if the client has any standards that projects need to adhere to, e.g. 12 factor.

That's why HMRC is so fixated on their wrong interpretation of MOO, as all this nonsense hinges on that. One can hope their PGMOL appeal gets rejected.

[northernladuk]

If you told the client that you will be off for a few days and have not sent a substitute, then most likely that invalidates the clause (according to guidance).

A sub for 6 days? Really?

[elsergiovolador]

If you told the client that you will be off for a few days and have not sent a substitute, then most likely that invalidates the clause (according to guidance).

[BR14]

Q.E.D.

[JohntheBike]

No.

And there will never be one. A case will not hinge on one point alone. It's too complex and a multitude of factors will need to be consider to make a judgement. I would have though if there was anyone on gods earth that would know this it would be you.

And another point, it's also even more unlikely to happen as substitution is less important as the other pillars, judges have commented on it and even Kate Cottrell has admitted it as so.

Anything to add to this thread that's useful now JtB or are you done?

the validity of any substitution clause is key in the CEST assessment and also in those of QDOS et al. So, the courts might not place the utmost of importance on it, but CEST and QDOS certainly do.

[BR14]

<get the last word in> placeholder

[northernladuk]

that's HMRC's (and their moles) take on it. But OK, point me to any case where the judge ruled the substitution clause as a sham and threw it out and then judged the individual as an employee.

No.

And there will never be one. A case will not hinge on one point alone. It's too complex and a multitude of factors will need to be consider to make a judgement. I would have though if there was anyone on gods earth that would know this it would be you.

And another point, it's also even more unlikely to happen as substitution is less important as the other pillars, judges have commented on it and even Kate Cottrell has admitted it as so.

Anything to add to this thread that's useful now JtB or are you done?

[JohntheBike]

Does it matter if it's IT related? You are the one that keeps telling us precedence is all. A failed case or judge calling a sub clause as a sham in any industry is going to put it under greater scrutiny across the board?

Not sure if you've seen this but I am sure you'll find this interesting.. and bore us to death about it.. but.

ESM0500 - Employment Status Manual - HMRC internal manual - GOV.UK

Scroll down and read ESM0533 onwards. ESM0535 particularly calls out the potential sham situations.

that's HMRC's (and their moles) take on it. But OK, point me to any case where the judge ruled the substitution clause as a sham and threw it out and then judged the individual as an employee.

[northernladuk]

I can't find an IT related one. The Autoclenz case wasn't really typical of our industry. I can find one which ruled the opposite way though, i.e. the contractual right of substitution over ruled the reality of the engagement.

So, can you point me to an IT related case, where IR35 was involved?

Does it matter if it's IT related? You are the one that keeps telling us precedence is all. A failed case or judge calling a sub clause as a sham in any industry is going to put it under greater scrutiny across the board?

Not sure if you've seen this but I am sure you'll find this interesting.. and bore us to death about it.. but.

ESM0500 - Employment Status Manual - HMRC internal manual - GOV.UK

Scroll down and read ESM0533 onwards. ESM0535 particularly calls out the potential sham situations.

[JohntheBike]

Jensal Software Ltd vs HMRC 2017.

thanks

"Judge Dean acknowledged that there was some restriction on the right of substitution but was satisfied that the clause pointed away from an employment contract. Interestingly, she gave no weight to the fact that the clause wasn’t exercised, which could set precedents for future cases"

that would appear to support my contention that the contractual right of substitution was accepted. I'd like to see an IR35 case where the contractual right of substitution wasn't accepted and judged as a sham.

[zonkkk]

I can't find an IT related one. The Autoclenz case wasn't really typical of our industry. I can find one which ruled the opposite way though, i.e. the contractual right of substitution over ruled the reality of the engagement.

So, can you point me to an IT related case, where IR35 was involved?

Jensal Software Ltd vs HMRC 2017.

[JohntheBike]

Yes'ish. Took me 30 seconds to find it on Google... Try it.

I can't find an IT related one. The Autoclenz case wasn't really typical of our industry. I can find one which ruled the opposite way though, i.e. the contractual right of substitution over ruled the reality of the engagement.

So, can you point me to an IT related case, where IR35 was involved?

[northernladuk]

Is there any case law surrounding substitution where a contractual right of substitution, however fettered, was not accepted by any court, and declared a sham?

Yes'ish. Took me 30 seconds to find it on Google... Try it.