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Engaging a substitute

Do the off-payroll rules apply?

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My client provides consultancy services to various clients, some of which are "medium" and "large" for the purposes of the off-payroll legislation.

She expects the engagements to fall outside IR35 and for this to be reflected in the determination from her client. 

From time to time, she engages a substitute to send in her place. The substitute invoices (via his PSC) to my client's PSC. Is my client required to issue a determination to the subsitute under the off-payroll legislation (because the end-client is a medium or large company)? Or, in this case, is my client the "end-client" and is exempt from the off-payroll rules by virtue of being a "small" company?

I fear I am getting myself into a muddle with this one! Would just like some clarification on where the responsibility for issuing determinations lies..

Thank you!

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By RedFive
12th Feb 2020 11:32

It's a good question in which you should find the answer here:

I think ESM10010 & 18 should help though havn't read in full yet.

My gut feeling on what I have absobed so far is no - your client is the end client in the example you quote and is a 'small' business and therefore not subject to the new rules.

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Replying to RedFive:
By sparkler
12th Feb 2020 16:38

Thank you - I have reviewed ESM10010 and 18, but can't find an example which seems to quite match that of my question.

It is clear that the "end-client" as far as my client is concerned is the "medium" or "large" engager, and they will need to issue a status determination.

But if my client hires a substitute (through the substitute's PSC) - is it enough for us to say that my client is still the party providing the services, and the substitute is engaged solely to my client - i.e. the chain as far as the substitute is concerned ends with my client's PSC?

In essence, I agree with your gut feeling - but can't quite work out why - and it's always good to be able to quote the legislation in these matters!

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