Correct Procedure for Tax Insurance

**Pondlife** · 5 March 2007, 15:37

Get your contract reviewed by the likes of;

Lawspeed
Accountax
Qdos
Bauer & Cottrell

Get the agency/client to make any changes based on the review.

Then try to ensure that any changes reflect your actual working conditions.

HTH

**themistry** · 5 March 2007, 16:01

Thanks for the response,

I was under the impression there was more to it. Especially in regards to making sure the contract that the Agency had with the actual employer is valid/correct/back-to-back (unsure what this means).

TM

**Pondlife** · 5 March 2007, 16:11

Quite right - the contract between the client -> agency should reflect the contract between agency -> YourCo but you may struggle to see it. That is, they're not obliged to show it to you as it's 'none of your business'.

**themistry** · 5 March 2007, 16:50

Hi Denny,

thanks for this reply. Very thought provoking.

Ok, so I will get in touch with the EB in regards to the contract, but what is it i need to be checking. 1) The contract they have with the employer is Back to Back or 2) The one they have with me is back to back?

Could you explain what you mean by Back to Back?

Secondly, I can get on the blower to the hiring manager and discuss working arrangements, I did cover this in the interview, however what points do you feel are valid and need to be covered?

Thanks again,
TM

**THEPUMA** · 5 March 2007, 19:27

I think Denny is unduly pessimistic.

If you have a contract that affords you the right of subsistution OR gives you control over the way the work is performed OR gives you no MOO, then it is very unlikely that HMRC will challenge this successfully.

They would have to prove that the contract was a sham.

In Ansell vs Richardson, HMRC brought in a contractor's line manager as a witness to the fact that he did not consider that there was MOO in the relationship. The judge have him short shrift, pointing out that he was not aware of the terms of the contracts in question, nor a party to either of them and, as such, his opinion was irrelevant.

In addition, the chances of a successful investigation are tiny. The chances of an investigation at all are substantially less than 1%, in my opinion.

If I had a contract that had been approved as not caught by IR35 and insurance to cover the tax, etc, I would sleep very easily at night.

**kingshuk** · 5 March 2007, 19:36

themistry,
If you are forming your limited company now then the company will trade for just one month (possibly less) before this financial year ends and the company report is filed. The likelihood of coming up as potential IR35 dodger for one month of business is slim.

13 months from now if you are still trading, another year end report gets sent - which is when you need to pay up the protection money

So might it not be better to buy the insurance then? Its probably not a lot of money but still defer business expenses if you can.

May be you can use that money to advertise your business in google

Kingshuk

**themistry** · 5 March 2007, 20:02

Thanks for all the replies,

before i make a start digesting them, can some kind sir explain what "MOO" means. Google definations are coming with nothing execpt noises that a cow makes...

TM

**kingshuk** · 5 March 2007, 20:04

Mutuality of obligation ---> http://www.contractoruk.com/ir35/mut...bligation.html

**kingshuk** · 5 March 2007, 20:50

I would start tossing and turning if I were you, PUMA. It's one thing counting sheep to sleep easy at night, quite another behaving like one by copying everyone else on here who just wants to do things the 'too good to be true' way

From past posts I think PUMA is an accountant and not a contractor. So is he affected by IR35 ?

PUMA my apologies if it is not so.

Correct Procedure for Tax Insurance