Should I take out liability insurance AND IR35 insurance?

**Lance** · 24 April 2021, 10:03

Originally posted by redpill View Post

My insurance is due and I'm wondering whether I should just take out professional/public liability insurance for £170 or cough up for IR35 insurance which is another £300. I know the emphasis is on the client now to deem your IR35 status so perhaps shouldn't need the insurance but I'm just wondering if I should get it for past contract investigations they might carry out.

What are your thoughts?

It's down to risk.
If you think you might be investigated for IR35 then the £300 will be well spent. I don't have that cover but I do have legal representation cover in the event of any tax investigation (IPSE+).

If you've had it till now then it would be daft to not continue for past contracts. But who not ring them and ask for a discount as the future risk isn't your so they have less risk.

**ladymuck** · 24 April 2021, 10:49

You started asking about whether you need both PII / PLI and IR35 insurance and then focussed on IR35 insurance only.

PII has nothing to do with IR35 and is a completely different type of cover. It's against you being negligent in your work and your client claiming against your company for damages. It's often mandated in contracts so it's unlikely you'll have any option to avoid paying it. PLI is to do with people entering your work premises and becoming injured. This one is highly unlikely to be needed but often gets bundled in to some insurance packages.

IR35 insurance is as Lance says. You take it out on the balance of risk probability. If the insurance is to cover the tax liability that may arised if a case was lost, then a decent rule of thumb is that if an insurer is willing to give you a policy (having reviewed your contract and working practices) then they're not expecting to pay out. It's better to have the legal cover as that's where your costs would be incurred if you were to be selected for investigation.

**redpill** · 24 April 2021, 11:03

I’ve only been trading 2.5 years and the last 9 months of non trade. 4 contracts were had and 2 were outside the UK. The 2 in the UK were 3-4 days a month before IR35 April 2021 laws. I therefore think past contract investigation is slim. Due to SDS statements wing required by the client to state work is outside IR35 maybe it’s just not worth IR35 insurance and maybe for peace of mind just get the contract reviewed by a legal firm? I’m not sure QDOS for example are an actual legal firm. There website states they will give their opinion on the contract review so not a legal fact just an opinion. Thoughts?

**Lance** · 24 April 2021, 12:03

Originally posted by redpill View Post

I’ve only been trading 2.5 years and the last 9 months of non trade. 4 contracts were had and 2 were outside the UK. The 2 in the UK were 3-4 days a month before IR35 April 2021 laws. I therefore think past contract investigation is slim. Due to SDS statements wing required by the client to state work is outside IR35 maybe it’s just not worth IR35 insurance and maybe for peace of mind just get the contract reviewed by a legal firm? I’m not sure QDOS for example are an actual legal firm. There website states they will give their opinion on the contract review so not a legal fact just an opinion. Thoughts?

but it's not relevant for the future. Only the past. No point having a review of expired contract. Just make sure you can afford a tax investigation, or insure yourself top cover those costs.

As I said. If you have had TLC35 then cancelling it now might be a bit short-term thinking. Ring them and ask them.
If you've never had TLC35 then don't bother buying it now.

Should I take out liability insurance AND IR35 insurance?