A self employed contractor enters into a contract to provide a service rather than personal skills and should be able to provide a substitute or engage helper to provide the service. An employee would provide his services personally. The case of Chaplin v Australian Mutual Provident (1978) held that:
“…the power of unlimited delegation is almost conclusive against the contract being a contract of service.”
The right of substitution is one of the strongest tests of self employment as shown in the case of Echo and Express Publications v Tanton (1999).
Although the majority of contractors may never exercise it, the right to substitute someone else to undertake the work must be a genuine one. The substitute must be answerable to, and paid by, the company who originally undertook to complete the contract.
The client may retain the right to veto a substitution on reasonable grounds, however this should be limited to factors such as the qualifications/experience of the proposed substitute or security issues.
See also IR35 Compliance Guide - Right of Substitution