Survive35 IR35 insurance (from Abbey Tax)

[Max E]

Hi

AbbeyTax provides Survive35 IR35 tax insurance.
It is only valid if

Qualifying contract (a contract, engagement or extension of that engagement that has passed an IR35 status review) falls within the scope of IR35 following either of the following IR35 Investigations:

(i) Corporation Tax Self Assessment Return Examination
The trigger point is the issue to the Insured of the Notice under Paragraph 24 (1) Schedule 18 Finance Act 1998 in order to examine the basis of one or more of the qualifying contracts that were in existence during the period of the Company’s Corporation Tax Self Assessment Return.

(ii) Employer Compliance Examination
The examination into the basis of one or more of the company’s qualifying contracts covered under this Policy, which takes place following an Employer Compliance visit by HMRC

Insurance costs about 400 pounds a year.

As far as I understand if IR 35 investigation starts from neither Corporation Tax Self Assessment Return Examination nor Employer Compliance Examination, the insurance will be invalid.

Does it make sense to buy this insurance, or should I buy a different one (e.g. QDOS)?

Many thanks

Max

[TheFaQQer]

As I understand it, they would cover you from the start of any compliance visit.

Where the Abbey Tax policy falls down (IMHO) is that you need them to have done the contract review in the first place, which isn't cheap by any means.

I have Qdos TLC35 instead - similar price for the insurance, but you don't need to have paid for an expensive review beforehand.

[TheFaQQer]

Oh, and before someone else says it...

You have to question why they can do it so cheaply, and have never had to pay out for any tax liability to date, yet still return a profit to their owners. There is no need to have this type of insurance, just make sure you have IPSE membership because they will fight the case for you and most / all cases are lost because you don't have professional representation from the start. And IPSE will fight a long way - no commercial company would have fought Arctic to the House of Lords like "we" did. But hey, it's your money to spend

(As I said above, I pay for Qdos TLC35 because I like the additional peace of mind that gives me in case I lost somehow)

[malvolio]

Oh, and before someone else says it...

You have to question why they can do it so cheaply, and have never had to pay out for any tax liability to date, yet still return a profit to their owners. There is no need to have this type of insurance, just make sure you have IPSE membership because they will fight the case for you and most / all cases are lost because you don't have professional representation from the start. And IPSE will fight a long way - no commercial company would have fought Arctic to the House of Lords like "we" did. But hey, it's your money to spend

(As I said above, I pay for Qdos TLC35 because I like the additional peace of mind that gives me in case I lost somehow)

WHS - apart from the last bit...

[jamesbrown]

Don't over-think this. If your working practices were misaligned with the contract, the insurance would be void. Thus, insofar as your working practices are aligned, this is insurance against the professional judgment on your status being incorrect. This carries a very low risk and, for this reason, the insurance offers little more than peace of mind. By the same token, I wouldn't worry about the details of the triggers for an investigation - they are not trying to catch you out (on the contrary, a payout would probably increase uptake of such policies in the long run) - I would instead worry about whether your working practices are aligned with the contract, retaining evidence of that.

[BolshieBastard]

Oh, and before someone else says it...

You have to question why they can do it so cheaply, and have never had to pay out for any tax liability to date, yet still return a profit to their owners. There is no need to have this type of insurance, just make sure you have IPSE membership because they will fight the case for you and most / all cases are lost because you don't have professional representation from the start. And IPSE will fight a long way - no commercial company would have fought Arctic to the House of Lords like "we" did. But hey, it's your money to spend

(As I said above, I pay for Qdos TLC35 because I like the additional peace of mind that gives me in case I lost somehow)

Probably because the number of IR35 investigations has been historically low, the insurance take up from contractors is also historically low ie head in sand about IR35 and, HMRC's success rate with IR35 is historically low.

Im a cynic where this insurance is concerned (and yes, I still have it myself when Im active) because we all know, insurance companies will try anything to get out of paying up any claim.

[SueEllen]

Probably because the number of IR35 investigations has been historically low, the insurance take up from contractors is also historically low ie head in sand about IR35 and, HMRC's success rate with IR35 is historically low.

Im a cynic where this insurance is concerned (and yes, I still have it myself when Im active) because we all know, insurance companies will try anything to get out of paying up any claim.

Not all the time even when they have to foot the bill.

Unfortunately for them there is an ombudsman service and the courts who can make them pay out, so in "cheaper" cases it's less expensive for them to payout in full.

What's "cheaper" depends on the type of insurance and therefore the risk of having to pay out....

[mudskipper]

Probably because the number of IR35 investigations has been historically low, the insurance take up from contractors is also historically low ie head in sand about IR35 and, HMRC's success rate with IR35 is historically low.

Im a cynic where this insurance is concerned (and yes, I still have it myself when Im active) because we all know, insurance companies will try anything to get out of paying up any claim.

It's been said a few times that it would be good for them if they did have to pay out, as the "They've never paid out" statement would no longer be true

[PerfectStorm]

Not one of the contractors I work with has IR35 insurance.

[mudskipper]

Not one of the contractors I work with has IR35 insurance.

Each to their own.