Substitution is a very important component when determining your IR35 status. Proving that someone else could provide the same work on your behalf (and you have the right to provide a substitute in your contract) can have a huge impact on your ability to continue working and being paid through your limited company.
In working out your IR35 status, an end hirer will consider a number of things, including ‘substitution’ – whether or not you can provide a substitute to deliver on the contract instead of you.
This question of whether your skills can be substituted – of if you are always required to carry out the work yourself – is a key method of distinguishing a contractor relationship from an employee relationship.
Because your contract is between the end hirer and your limited company – not you personally – it shouldn’t matter if the work is completed by another equally skilled professional working under the limited company. A clause in your contract, stating that a substitute would be acceptable, helps to ensure that your status falls outside IR35 with that end hirer.