Just been offered to go perm

[jk3838]

Edit: May as well start with CUK's own info on this:Contractors, don't get lumbered with your limited company's tax bill

and this

IR35 taxes uncollectable if contractors’ company has no money

[dx4100]

Your insurance provider? Your MVL provider? What provider?

IR35 tax loss insurance provider

[dx4100]

It depends. Limited liability protection is unlikely to be transferred to personal liability if due diligence on IR35 assessment to operate outside of it can be shown to be done. i.e. if you have contracts reviewed and have a written determination by a reputable third party then that shows you operated in good faith and it would take exceptional circumstances for HMRC to chase you personally for tax liabilities that fall under the PAYE system of the Ltd, so if the funds in the Ltd don't cover the liability then HMRC may win an investigation but not be able to collect the full amount they now say is due.

The issue with 'it depends' is the potential for a lot of drawn out hassle and stress while an investigation is ongoing, so the approach of getting contracts reviewed and backed up with insurance is a good way of trying to cover that as best you can.

Google 'IR35 and personal liability' for more information from accountants and those that have dealt with this scenario for real clients (contractors), that is the basis of my understanding of how this may apply.

Edit: May as well start with CUK's own info on this:Contractors, don't get lumbered with your limited company's tax bill

For the last 10+ years I have always presumed if I was found inside then everything would automatically become due... Guess this is great for me as i have always had reviews etc

[WordIsBond]

IR35 tax loss insurance provider

Ok, so they are telling you to keep paying them premiums after your company is closed. That works well for them.

There's no evidence this is necessary. It does provide you protection in case HMRC do something they've never done before -- pursue an IR35 case after the company is closed. Maybe in this brave new world we are entering that will be necessary. I'd say the risk is very, very low, but if so I don't know why it stops after two years. But the point of insurance is to protect against risk, so you measure how great you think the risk is, in terms of likelihood and impact, and set it against the cost of the insurance, and decide whether it is worth it.

[dx4100]

Ok, so they are telling you to keep paying them premiums after your company is closed. That works well for them.

There's no evidence this is necessary. It does provide you protection in case HMRC do something they've never done before -- pursue an IR35 case after the company is closed. Maybe in this brave new world we are entering that will be necessary. I'd say the risk is very, very low, but if so I don't know why it stops after two years. But the point of insurance is to protect against risk, so you measure how great you think the risk is, in terms of likelihood and impact, and set it against the cost of the insurance, and decide whether it is worth it.

Well it comes down to your attitude to risk I suppose...

If you think there is no coming after you then you wouldn’t need either the investigation insurance or tax loss insurance beyond company closure . My attitude to risk is a little more prudent than that.

Each to their own

[WordIsBond]

My attitude to risk is a little more prudent than that.

Each to their own

LOL. I could argue it's not 'prudent' to waste money on unnecessary insurance for a risk that has never materialised for anyone ever. Who's 'prudent'?

If I were in your shoes, I'd be asking them why the insurance is needed after the company closes. I'd be asking them if anyone has ever been investigated for IR35 after the company closes. And if they say no, I'd be saying, 'So why do I need it? Are you going to offer me a discount on the premium after the company closes? Can you really justify the same premium if there's almost no risk, if no one has ever been investigated?'

If they can convince you that there really is a need, fine. If you can get a discount, fine. But I'd never recommend that anyone just accept an insurer's word that you need a certain level of insurance.

[dx4100]

I get your view points but if its possible I wouldn’t put it past HMRC and would take the lower risk approach probably.

[techsoftlondon]

Well I took your advice and am going perm.

Next q is when?
Contract ends on Friday.
I could start as perm next Monday.
Or does that look dodgy.
We had someone here who left on Fri as perm and came back as contractor.

What happened when the public sector was affected?
Did contractors go perm?
or did they all leave for the public sector.

Still waiting for accountant to reply to my q's about it.
Really wont miss them and they're one of the biggest but have been VVV sloppy lately.
Nearly messed up my VAT and Corporation tax this year.

[dx4100]

You can go contractor to perm without issue as long as your working practices and role are different. If not you are clearly giving fuel to HMRC to call your previous position as inside.

You can go perm to contracting as long as the same applies... Different working practices and role...

[techsoftlondon]

I have different role/title but work is basically the same.

Working practices
- contractors and perm all have same IT manager though I work on 7 different app so have 7 different managers.
- As perm I now get access to things like the canteen

Last contract I had as contract I submitted to two different IR35 review companies.
- had the contract amended a number of times to pass it.