The right of substitution should be a permanent fixture in every contractor’s business model

If we’re sure about one thing in 2020, it’s that things will never go back to how they were before the Coronavirus pandemic. Even if by mid-2021 we can safely move around without facemasks, see as many friends as we want and have glorious, sunny holidays again, the world we live in will have changed forever.

Firstly, if this crisis has taught businesses anything it’s that there’s no real need for employees to go into the office five days a week – research indicates that moving forward, a 50/50 split between office and remote working seems likely. Secondly, IR35 reform will have become law and have affected virtually everyone reading this post in some capacity.

Right now, if you haven’t already had communication from your client regarding the way they intend to assess your IR35 status, you soon will. Frustratingly, despite it being non-compliant, some firms continue to impose blanket IR35 determinations, with others choosing to force contractors into umbrella working – Sainsbury’s Bank, I’m looking at you! That’s not to say this approach is the norm, though. BT, for example, along with plenty of others look set to assess IR35 fairly and sensibly. 

Those who have read any of my previous posts will have a sense of my view of the right of substitution – how looking at it differently, in a way so it can be practically implemented, is essential to your IR35 status. If you’re yet to read my other articles, I’ll explain – from where I stand, it’s vital that contractors think and act differently, in the way that a genuine business does, to safeguard their IR35 status ahead of reform this coming April.

As a contractor, I believe you should form alliances with others to complement your existing skill set. Speaking from experience, I know that over the past year some contractors have got together to form consultancies to combat the substitution clause, which still proves instrumental in securing an outside IR35 contract. 

Collaborate with other contractors

One solution is to partner with organisations or other contractors who complement your skills. Let’s say you’re a developer for argument’s sake – build relationships with a QA who can test and assure your code. Or if you work in marketing and don’t have any knowledge of LinkedIn marketing, then find a substitute who does.

Don’t worry about the traditional concept of substitution (someone who can take over your role for two weeks while you’re on holiday). Instead, find a contractor able to complete aspects of your deliverables better than you can. Doing this allows you to provide your client with a legitimate substitute and a far superior service. By delivering a better service and behaving as a company and not an individual, you are working towards removing the notion of personal service and therefore showing you belong outside IR35 – crucial given reform is rapidly approaching.

Sell your services as a substitute

Alternatively, flip substitution on its head. Which part of your job could be useful as a substitution service? What is it that you do exceptionally well that your peers need help with? Collaborating with other contractors here and there and, in turn, being engaged in multiple projects will also strengthen your case for working outside IR35.

What has been very clear to us at The Sub Bench in recent months, is that there’s a collective concern among contractors about broaching the subject of substitution with clients. There are many reasons for this, but the underlying one is that it’s a question that hasn’t been asked before. Contractors have rarely spoken to their clients about how they can demonstrate and exercise the right of substitution in a manner that enhances and improves the service they deliver.

Of course, in the coming months, these conversations are likely to take place more often. But right now, I don’t know how companies will react. However, there’s no doubt that by actively pursuing substitute relationships with those who complement your skill set, you can only further improve your case for an outside IR35 determination.

By developing these partnerships with other contractors over time, you’ll also be well placed to win more work. So, rather than thinking of substitution as a box to tick, see it as a core part of the service you provide – one that’s a permanent fixture in your offering that serves to the benefit of you and your clients.

This article was written by Ben Clark, CEO of The Sub Bench, which is a new concept that helps contractors legitimately promote their outside IR35 status. To learn more about how this service helps remove the notion of personal service, please click here.