New insurance rules for small companies

**malvolio** · 21 February 2005, 16:39

Bad news??

If you don't need ELI you are clearly not a real business because you don't have any employees therefore you have no valid defence against IR35... Do not make the mistake of taking such announcements at face value.

Dunno about you but I get my ELI bundled with the whole PI package at a little under £300 pa, so it's not going to be much of a saving.

**IR35 Avoider** · 22 February 2005, 19:05

Re: Bad news??

I thought we already didn't need this insurance - something to do with the director not (necessarily) being an employee perhaps?

**Vetran** · 27 February 2005, 02:10

Re: Bad news??

The legislation provides that an owner/sole employee is not required to purchase ELCI if the business remains unincorporated. However the incorporation of a business creates a separate legal person, the company, who acts as the employer and a requirement to purchase ELCI.

Well thats us out then. If you are a plumber you are OK. But I haven't found many IT contractors that are self employed.

**antell** · 27 February 2005, 19:17

quote is regarding the previous legislation

I think that quotation must relate to the position today i.e. before the amended legislation comes into force from tomorrow.

From tomorrow, limited companies which have only one employee are not required to have ELI if that one employee owns 50% or more of the shares.

Of course, limited companies which have no employees never did have to have ELI and, as someone has pointed out, it is possible to be a director without being an employee.

John Antell

www.john.antell.name

New insurance rules for small companies