IR35 insurances required going forward?

[northernladuk]

We've touched on this in various posts but no real discussion on this as a single topic so just like to check my thinking.

The client/fee payer is now responsible for an SDS so I think we all agree contract checks for IR35 alone are no longer required. Business check on the terms etc still worthwhile.

So the responsibility is with the client and as long as we check our contracts and get rid of any terms attempting to pass the liability to the contractor there is no need for IR35 insurance? Still an argument for tax investigation insurance but not directly IR35. TLC35, IPSE, whatever that is directly related to fighting an IR35 enquiry for contracts with an SDS is not required yes?

It can still help with historic contracts pre April of course but not for a contract with a client/fee payer supplied SDS?

Could HMRC gearing up for investigations have any bearing on this? Is there any chance that this could start land at a contractors doorstep even if the rules are the feepayer bears the responsibility? If there is even an outside chance of this do I assume the insurances as they stand probably wouldn't cover this anyway?

Obviously I ask as my TLC35 is due and I'm struggling to see why I need it. I've dropped my IPSE cover, more on principle than requirements. Are people carrying on with their current insurances for a year or two going forward just to cover historic contracts or is IR35 as it was no longer needed?

[meanttobeworking]

I'm in the same boat. Both IPSE and TLC35 due for renewal this month.

I'm considering letting IPSE lapse and perhaps renewing TLC35 with a lower amount of cover just to cover the risk of an investigation for previous years.

[jamesbrown]

IR35-specific insurance? I think you’re on the right track, no point when the supply chain above YourCo is responsible and liable. There are some insurers that offer to cover the entire supply chain, but why bother if YourCo is not liable? I think IPSE is a different calculation because they offer more than tax investigation insurance, of which IR35 is only part.

[ladymuck]

I've never held TLC35, as just relied on the IPSE package. As JB says, the package has more than just that insurance and it's cost effective even if I don't agree with the other side of the organisation.

I personally would be inclined to retain some level of insurance until we see what investigations HMRC kick off and whether those contract clauses trying to push the liability down the chain hold any water. Whether existing policies cover that, I don't know, and I ought to make a mental note to make enquiries and check the terms.

[malvolio]

IMHO the thing to remember amid all the IPSE bashing is that its Plus cover is for any tax-related inquiry, not just something to do with IR35. If the client or the agency tries to drop their liability on to you, IPSE will cover you despite it not being an IR35 issue. I'm not convinced the more specific insurances would do so...

[northernladuk]

IMHO the thing to remember amid all the IPSE bashing is that its Plus cover is for any tax-related inquiry, not just something to do with IR35. If the client or the agency tries to drop their liability on to you, IPSE will cover you despite it not being an IR35 issue. I'm not convinced the more specific insurances would do so...

And I would agree and must admit although I've dropped IPSE I'm considering swapping from dedicated insurance back to this as it covers the IR35 if need be but the other aspects are useful. I'm not comfortable paying for dedicated IR35 insurance but if IPSE covers that to some extent plus the other stuff I might be better picking that up again.

I'm not trying to save 250 quid, just trying to not pay for something that doesn't do anything for me at all.

[northernladuk]

I've never held TLC35, as just relied on the IPSE package. As JB says, the package has more than just that insurance and it's cost effective even if I don't agree with the other side of the organisation.

I personally would be inclined to retain some level of insurance until we see what investigations HMRC kick off and whether those contract clauses trying to push the liability down the chain hold any water. Whether existing policies cover that, I don't know, and I ought to make a mental note to make enquiries and check the terms.

I can't imagine they do. It's new, we don't know what it going to happen or if it's even possible. I very much doubt an insurance provider would be happy to cover it with a policy that hasn't assessed the new risk and potential fall out etc. I imagine they'd want to look at what the future state might be and alter their offering to suit. Insurance companies aren't in the habit of say 'Ah going we'll cover it' when there are unknown risks on the table.

[ladymuck]

I can't imagine they do. It's new, we don't know what it going to happen or if it's even possible. I very much doubt an insurance provider would be happy to cover it with a policy that hasn't assessed the new risk and potential fall out etc. I imagine they'd want to look at what the future state might be and alter their offering to suit. Insurance companies aren't in the habit of say 'Ah going we'll cover it' when there are unknown risks on the table.

I agree. I asked the question on the IPSE forum to see if anyone knows if you'd have any form of cover if you signed a contract that pushed the liability down to you.

[jamesbrown]

And I would agree and must admit although I've dropped IPSE I'm considering swapping from dedicated insurance back to this as it covers the IR35 if need be but the other aspects are useful. I'm not comfortable paying for dedicated IR35 insurance but if IPSE covers that to some extent plus the other stuff I might be better picking that up again.

I'm not trying to save 250 quid, just trying to not pay for something that doesn't do anything for me at all.

I think so. What you don't get with IPSE is any sort of tax loss cover, only cover for professional fees, but I've always thought that tax loss cover was a complete waste of money (most policies have very weasily terms like "reasonable prospect of success", even if a payout would be good advertising for them). YMMV.

[jamesbrown]

I agree. I asked the question on the IPSE forum to see if anyone knows if you'd have any form of cover if you signed a contract that pushed the liability down to you.

You mean cover for professional fees under investigation? I am pretty sure, yes, because it covers all types of investigation. Tax loss or claims related to contractual terms? Definitely no, and that has never been offered.