Even Stronger Than the 10 Out of 10 Cases HMRC Lost...
Ever since the launch of 34square, our main message has been that what we resolve is that sole reliance upon substitution lines in a contract that so many clients, recruiters and contractors have placed their trust in for two decades. If you combine those lines in a contract, assuming they are robustly worded, with an irrefutable capability and intent to substitute should the need arise, then you transform your paper tiger right of substitution into a properly ferocious, stripy feline. With 34square, you can even cement or strengthen the rights stated in any contracts and mitigate the risks of any contradictions or conflicting witness testimony.
Combine all of that with a limitlessly repeatable, refinable, guided, robust and fair IR35 assessment process and you have 34square... the pinnacle of safe outside IR35 compliance for contractors.
We qualitatively and quantitatively reviewed 36 IR35 appeals tribunals. All 1100 pages. 26 cases had weak rights of substitution, many with lines in contracts. In deliberation and witness testimony, HMRC is adept at breaking it apart, either because the right is too restricted or fettered, or perhaps because witness testimony contradicts the contract content. Sometimes back to back contracts aren’t sufficiently aligned. Or it could simply be that there's insufficient evidence of any intent or capability. HMRC won 17 of those 26 cases with an absence of a strong right of substitution and/or feasibility to execute in line with their stipulations.
The other 10 appeals cases had strong rights of substitution. HMRC won none of them. That’s right. None. And 34square provides a package even stronger than these 10 out of 10 cases HMRC lost:
- A ground-breaking actual substitution capability, with process automation tools to generate legally binding contracts that legitimately oblige the substitute company to deliver the services, whilst the main contractor’s company retains overall responsibility to the end client. Evidence of intent and capability, in line with HMRC stipulations.
- An optional Right of Substitution Declaration between contractor limited company and client, to avoid witness testimony issues and combat weaknesses in contract wording. This also triggers Status Determination Statement generation by the client, should they wish to use it.
You can join us... or you can take your chances. They’re at best one in three if you end up in court. With a rock solid right of substitution, however, the chances of HMRC even raising a dispute are arguably negligible. A sufficiently strong right of substitution is not a loophole. It puts you outside IR35. Because it's the law.
An added bonus with 34square is that you are also advertising your services on our platform for substitution work, which contributes at least something to a demonstration of being in business on your own account, a factor that resulted in HMRC losing their appeal case against Kay Adams from the BBC.