How long to keep IR35 insurance up?

[OneManBand]

My Qdos IR35 insurance is up for renewal shortly. Is there still any point in keeping it for the sake of potential past investigations?

[Fred Bloggs]

My Qdos IR35 insurance is up for renewal shortly. Is there still any point in keeping it for the sake of potential past investigations?

Has the limited company been struck off?

[ladymuck]

Has the limited company been struck off?

^^ this

If your company is still trading then there's still risk of an investigation. If you've closed it down then HMRC can't come after something that no longer exists.

[jamesbrown]

Not enough information, really. If you've closed your company, possibly not. It may be invalid anyway depending on the T&C, but I would keep IPSE (for example) for a year or so (legal expenses cover, not insurance). If it's open/dormant, I would keep it for longer. Realistically, it may be some time after the tax year ended before an investigation is triggered and it may not look like an IR35 investigation for some time on top of that. If you're talking about tax loss insurance, that is pretty much a waste of money. It's the legal expenses insurance that you want and probably want to retain for some period (depending on the above circumstances).

[jamesbrown]

If you've closed it down then HMRC can't come after something that no longer exists.

Well, they can, but it would require fraudulent or negligent behavior to transfer any debt to the individual, and you would be extremely stuffed with or without insurance in that case (unlike the MSC legislation, which doesn't have a high bar).

[OneManBand]

Company is still trading. Contracting through company, but outside.

The insurance in question is the tax liability cover (TLC35) from Qdos.

But do I really have to have the insurance for as long as the company trades? Isn't there a limit of 6 years after which you no longer need to keep the documents, so that must mean they cannot come after you once 6 years have passed?

[jamesbrown]

Company is still trading. Contracting through company, but outside.

The insurance in question is the tax liability cover (TLC35) from Qdos.

But do I really have to have the insurance for as long as the company trades? Isn't there a limit of 6 years after which you no longer need to keep the documents, so that must mean they cannot come after you once 6 years have passed?

It depends what sort of outside contracts you're taking. If you have small clients and/or fully overseas supply chains, then nothing has changed. If you don't, then your insurance is probably moot (for contracts that fall under Chapter 10), yes. Then again, TLC35 was always moot, a complete waste of money IMHO.

Regarding timelines for tax enquiries once opened (from the end of the relevant tax year): 4 years normally, 6 years if negligent, 20 years if fraudulent.

[PerfectStorm]

I wonder if QDOS will throw a party when the first TLC35 payout happens

[jamesbrown]

I wonder if QDOS will throw a party when the first TLC35 payout happens

If I were them, I wouldn't buy any Party Poppers in anticipation.

[Fred Bloggs]

I wonder if QDOS will throw a party when the first TLC35 payout happens

I guess they can afford to. With Dom Perignon all round.