Common IR35 Errors Guide - Part 3

“I don’t know of any potential replacements for me, so my right of substitution is not genuine.”

This frequently stated misapprehension is very common, and in fact something that the Revenue themselves have flagged from time to time. What must be remembered here is the question of ‘substitution’ is all hypothetical. So basically, if one was unable to provide the services themselves but, hypothetically, one had a similar replacement lined up, would it then be possible to be able to send them in your place?

Almost all contractors (and indeed end clients) recoil at the idea that anyone off the street could be dragged in set doing the work in their place, but it certainly isn’t that literal or severe.

Despite how it would seem, the potential ‘substitute’ provided  wouldn’t actually need to be an employee, instead providing you were accountable for paying them, they could technically be another limited company contractor altogether. In theory, the contractor would be able to source them through an agency or other network of similar limited company traders.

By:Troy Stevens

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