Tax liability insurance

[SandyD]

Anyone taking tax liability insurance (to cover for HMRC enquiries etc)
I always make sure all my taxes are OK and my contract reviewed and outside IR35, but as you know no guarantees...
I used to take a reasonable cover like for 50K, but was advised to increase the cover substantially by my insurer and that would cost double... just wondered if others are taking such insurance? And up to how much of your yearly income do you cover? i.e. 100% or less?

[Lance]

was advised to increase the cover substantially by my insurer

You see the problem here don't you?

[SandyD]

You see the problem here don't you?

Yes, but wondered if others get a cover to cover all their turn over or proportion of it?
I was getting a cover for 50% of my annual turn over, but not sure if this is sufficient.

[Scruff]

Anyone taking tax liability insurance (to cover for HMRC enquiries etc)
I always make sure all my taxes are OK and my contract reviewed and outside IR35, but as you know no guarantees...
I used to take a reasonable cover like for 50K, but was advised to increase the cover substantially by my insurer and that would cost double... just wondered if others are taking such insurance? And up to how much of your yearly income do you cover? i.e. 100% or less?

Sandy

I have IPSE+ Cover, as well as TLC35 from QDOS (at a level that I can live with - it is not as expensive as losing the billable days, in the event of taking time out!).

[Lance]

Yes, but wondered if others get a cover to cover all their turn over or proportion of it?

Why would you cover all your turnover? Your tax liability will be smaller than turnover.

You may want to cover you tax liability completely, but IMO if you do that you have accepted that you'd lose if investigated so you could consider paying your tax in full instead of risking it an insuring against it.

[SandyD]

Why would you cover all your turnover? Your tax liability will be smaller than turnover.

You may want to cover you tax liability completely, but IMO if you do that you have accepted that you'd lose if investigated so you could consider paying your tax in full instead of risking it an insuring against it.

I chose to cover a bit more than my tax liability alone (in case one is charged interest) but not completely cover my turnover... so middle ground...

I found other places doing it cheaper, but they cover for 4 years only instead of 6 years...

[pr1]

Why would you cover all your turnover? Your tax liability will be smaller than turnover.

You may want to cover you tax liability completely, but IMO if you do that you have accepted that you'd lose if investigated so you could consider paying your tax in full instead of risking it an insuring against it.

Why on Earth would you do that? Pay (eg) £20,000 extra tax instead of a £500 insurance policy that will cover it? Are you insane?

[JohntheBike]

Anyone taking tax liability insurance (to cover for HMRC enquiries etc)
I always make sure all my taxes are OK and my contract reviewed and outside IR35, but as you know no guarantees...
I used to take a reasonable cover like for 50K, but was advised to increase the cover substantially by my insurer and that would cost double... just wondered if others are taking such insurance? And up to how much of your yearly income do you cover? i.e. 100% or less?

Abbey Tax are offering this now through general accountants, so you don't have to join an organisation to get it.

[Lance]

Why on Earth would you do that? Pay (eg) £20,000 extra tax instead of a £500 insurance policy that will cover it? Are you insane?

Because if you know you'd lose you know you're doing it dodgily.
The OP seems to be wanting insurance to cover the certain losses of an investigation.

IMO that is fraud/evasion/GAAR.

The insurance is there to cover the risk of losing a tribunal, not the risk of an investigation (there are cheaper ways to cover that).

[pr1]

Because if you know you'd lose you know you're doing it dodgily.
The OP seems to be wanting insurance to cover the certain losses of an investigation.

IMO that is fraud/evasion/GAAR.

IMO that is exactly what TLC35 is covering - why else get TLC35 rather than just tax enquiry insurance?

TLC35 is a comprehensive IR35 insurance policy designed with the threat of IR35 in mind. This tax liability insurance policy will protect you in the event of HMRC opening an enquiry into your accounts, whether it is a PAYE compliance review, VAT dispute, IR35 enquiry or a broad range of other HMRC enquiry, Qdos will be there from day one to defend you.

In addition to this invaluable support, the policy will also cover any tax/NIC liabilities, interest and penalties should you be found ‘caught’ by the IR35 legislation up to the indemnity on your policy schedule.