Considering the evidence: substitution clauses
As stated at ESM3320 above, in an IR35 situation it is necessary to construct a notional contract between the worker and the client. Consequently, the views of the client on the issue of substitution are particularly important. It is not just a matter of importing clauses in written contracts into the notional contract.
A clause may be worded in such a way that it quite clearly indicates that no personal service is required - see the case of Express & Echo Publications Ltd v Tanton (ESM7210). But the imputed clause in that case was extreme and there was an obligation, not a right, to provide a substitute when Mr Tanton was unwilling or unable to provide his services personally.
It is much more likely in an IR35 situation that you will be considering a right of substitution rather than an obligation to provide a substitute and that the right will be fettered to some extent. It should be noted that, where a hypothetical contract is considered to contain a right of substitution, that right is likely to be only an indicator of self-employment to be weighed with all the other factors. Park J undertook a review of the case law relating to substitution provisions in the case of Usetech Ltd v Young - see ESM7270. The approach taken in Usetech was followed by Henderson J in the case of Dragonfly Consultancy Ltd v HMRC - see ESM7290. There is further guidance at ESM0533 onwards.
Where you only have the personal service company/agency contract, which contains a substitution clause, you would certainly want to seek evidence about substitution from the end-user. The courts would consider that evidence to be very important. Would the end-user permit the worker to send a substitute or would they only accept a substitute from the agency? Would the worker pay the substitute? And did it happen in practice? In the personal service company situation, the worker and the service company are effectively one and the same. That is not the case in the composite service company situation where the worker is an employee and only one of several shareholders. In those circumstances, you will have a worker/service company contract and it is even more essential that you seek the views of the end user where it is suggested that the worker has a right of substitution.