I'd really appreciate someone sanity checking my logic as I am new to contracting (and most of the threads here are related to existing public sector contracts).
I am due to start contracting (CL1 via capita) with a public sector body after 6th April. The setup is that the PSB will use Capita to engage an agency who pay my Ltd company. The PSB offer letter stipulates:
"At all times during the assignment period you will be providing your services as an independent contractor, nothing in this letter or otherwise should be construed as creating an employment relationship between yourself and <PSB>."
I assume this means the PSB, as the client, are declaring my contract outside IR35.
My understanding is that the agency, being the body that pays my Ltd company, will hold liability for paying tax and employer/employee NICs should HMRC come knocking and determine the contract to actually be inside IR35.
As such I do not see the value in IR35 insurance (either enquiry or full liability) as it will be the agency who will have to foot the bill.
Is my logic correct or have I made a newbie blunder and missed the point completely?
Thanks in advance!