Have you ever used a Substitute - how do you go about this? Have you ever used a Substitute - how do you go about this?
Page 1 of 2 12 LastLast
Posts 1 to 10 of 18
  1. #1

    Godlike

    ChimpMaster's Avatar
    Join Date
    Jan 2006
    Location
    Here There and Everywhere
    Posts
    5,482

    Default Have you ever used a Substitute - how do you go about this?

    Hi all

    Thinking of getting in a substitute contractor to cover my holiday leave. It's only for 2 weeks but I wonder if this will be a good chance to further add weight to my contract being out of IR35.

    Client should be OK with this.

    My plan is to pay the sub-contractor from my Ltd Co.

    I don't care if I charge the client - but is this important? Can I charge them less for those 2 weeks?

    Do I need to have a new contract with the client for the sub-contractor?

    I will need a contract with the sub-contractor. Any idea where I can get hold of a suitable contract?

    Apologies if this is basic stuff, but I haven't used a substitute before.
    Last edited by ChimpMaster; 7th June 2019 at 14:43.

  2. #2

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    39,476

    Default

    Looking at that list I really wouldn't be messing around with a sub just for IR35 purposes. My thinking would be.

    Chance of losing an IR35 case if you've done everything correctly - Slim to non
    Chance of a sub making a difference - Slim to non as you were going to win without it.
    Chance of messing up the sub process, sub letting you down, you looking a clueless noob in front of your client - Very high.

    Don't do stuff for IR35 reasons, particularly if it could have a detrimental affect on your gig. Do stuff because it's right for your business.

    I mean, do you charge the client for a sub.. Isn't that whole point? Charge them less? Why on earth would you do that?

    On top of all that you've forgotten that it's up to you to source and train up the sub in your own time. That body needs to arrive at your client ready to substitute you, not sit at a desk looking utterly clueless and then have a 2 week onboard process. They have to continue to add the value you do, they are a substitute for you. You can't do this on client time so your 2 week holiday suddenly becomes more expensive. The substitute will expect to be paid for the hand over so not only can you not charge for these days you've got to pay someone to be there. I can't believe for one minute it's worth doing that for 2 weeks.

    Forget all this. Make sure your working practices are outside, your contract has passed a check and you have IR35 insurance and just go on holiday and enjoy it.
    Last edited by northernladuk; 7th June 2019 at 14:59.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  3. #3

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    39,476

    Default

    If you want evidence then get a mail from your client that they'd be happy to take a sub on for this time and then just file it. The fact you've got clear evidence the client would allow it is almost as strong as it happening.

    On a side note though. Got to be careful bringing subs up with a client. If they turn round and say no you've just destroyed your own IR35 status. Sometimes it's better just to keep schtum.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

    Godlike

    ChimpMaster's Avatar
    Join Date
    Jan 2006
    Location
    Here There and Everywhere
    Posts
    5,482

    Default

    Quote Originally Posted by northernladuk View Post
    If you want evidence then get a mail from your client that they'd be happy to take a sub on for this time and then just file it. The fact you've got clear evidence the client would allow it is almost as strong as it happening.

    On a side note though. Got to be careful bringing subs up with a client. If they turn round and say no you've just destroyed your own IR35 status. Sometimes it's better just to keep schtum.
    This is actually a very good idea.

    The reason I'm thinking about a sub is that it's almost the holy grail to get out of IR35 (isn't it?), according to CEST as well... yea I know CEST is tulipe but it tells us what HMRC/Government are thinking.

    In my mind I have a strong case that I am outside of IR35, but I have been at this client for a long time now (...years) so every little bit helps.

    The client manager is very amenable to my requests, having known me for so long. So getting an email 'accepting' a sub should be very possible.

  5. #5

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    39,476

    Default

    Gathering IR35 is a must. Mails excluding your from meetings, photocopy of your pass if it's different to perms and so on.

    The letter would put you a head of a vast majority of contractors so will stand you in good stead. If the client is so laid back he may be amenable to a confirmation of arrangements which is very useful. It means HMRC can't accuse you of yoir contract matching working conditions. QDOS do a CoA template so have a look on their site.

    The fact you are putting so much effort in to your status in general also means you are way ahead of the game.

    I'm not so sure any one thing is a silver bullet for IR35 so I don't thing its the best idea to put your gig at potential risk chasing it when you've already got good evidence. I seem to think (but I could be wrong) Batcher had some very strong evidence in his case but it still lasted years before they dropped it.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  6. #6

    My post count is Majestic

    northernladuk's Avatar
    Join Date
    Mar 2009
    Posts
    39,476

    Default

    Confirmation of Arrangements is here.
    Confirmation of Arrangements - IR35 Resources - Qdos Contractor

    Just make sure you get it signed by a decision maker and not just the client manager. Maybe both if you are unsure.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  7. #7

    Still gathering requirements...


    Join Date
    Nov 2017
    Posts
    79

    Default

    Quote Originally Posted by ChimpMaster View Post
    I don't care if I charge the client - but is this important? Can I charge them less for those 2 weeks?
    The client won't be upset if you charge them less, however what happens if the sub turns out to be capable and can do everything they need...

    Then they come to you and say they intend to keep the sub or would you mind doing the job at the lower rate

  8. #8

    Double Godlike!

    malvolio's Avatar
    Join Date
    Jul 2005
    Location
    Walking in the garden, dreaming of Olivia...
    Posts
    11,249

    Default

    Just remember that the substitute takes over the current contract for the duration, they are not a sub-contractor working for you. That means that they have to hit all your agreed targets and contractual conditions which includes charge rates - which means in turn you will have to negotiate with them how much of the rate they get to keep.

    But if it works properly then IR35 ceases to be an issue. Even CEST wold pass it.
    Blog? What blog...?

  9. #9

    More time posting than coding


    Join Date
    Dec 2015
    Posts
    494

    Default

    Charge your full rate and pay your sub less.

    Happy to share the contract I use for subbing. PM me if you want it.

    I use hellosign for handling the signing of the contract. It’s free and provides a decent level of traceability.

    I’ve always engaged another ltd company contractor as it’s simply a business to business. I don’t know the implications of engaging someone direct and paying them directly.

  10. #10

    More time posting than coding


    Join Date
    Mar 2016
    Posts
    212

    Default

    Quote Originally Posted by northernladuk View Post
    Gathering IR35 is a must. Mails excluding your from meetings, photocopy of your pass if it's different to perms and so on.

    The letter would put you a head of a vast majority of contractors so will stand you in good stead. If the client is so laid back he may be amenable to a confirmation of arrangements which is very useful. It means HMRC can't accuse you of yoir contract matching working conditions. QDOS do a CoA template so have a look on their site.

    The fact you are putting so much effort in to your status in general also means you are way ahead of the game.

    I'm not so sure any one thing is a silver bullet for IR35 so I don't thing its the best idea to put your gig at potential risk chasing it when you've already got good evidence. I seem to think (but I could be wrong) Batcher had some very strong evidence in his case but it still lasted years before they dropped it.
    Invoking a substitution clause is most definitely a silver bullet.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •