IR35 Insurance - Cost

**dude69** · 30 January 2008, 10:26

Originally posted by Crossroads View Post

A question for those in the know...how much does IR35 insurance from QDOS and their ilk typically cost...say for the following:

Contract Review (found to be outside in their opinion obviously)
£100k legal fees cover
£100k tax/fines cover if case lost

I've always been of the opinion that if an insurance company is willing to cover you then your contract is firmly outside IR35, but just curious as to the cost of the extra peace of mind.

Not looking for a debate on whether it is worth it or not...

Investigation insurance for legal fees I think is under £100. So a sensible purchase.

Tax insurance to cover any penalties is far more expensive and requires each contract to be insured separately for a number of years - expensive.

**Qdos Contractor** · 30 January 2008, 10:48

Originally posted by dude69 View Post

Investigation insurance for legal fees I think is under £100. So a sensible purchase.

Tax insurance to cover any penalties is far more expensive and requires each contract to be insured separately for a number of years - expensive.

Sorry, that's not accurate with us.

Representation insurance (our fees in defence of any HMRC enquiry) costs £99 per annum.

TLC35, which covers all IR35 liabilities in addition to all representation, costs £355 per annum. This covers as many contracts as you wish to insure and is fully backdated. The number of contracts under the policy does not affect the premium. As long as you have the policy in place when you receive notice of an enquiry, you will be insured regardless of the contract or period HMRC are looking into.

**Qdos Contractor** · 30 January 2008, 10:50

Originally posted by Crossroads View Post

A question for those in the know...how much does IR35 insurance from QDOS and their ilk typically cost...say for the following:

Contract Review (found to be outside in their opinion obviously)
£100k legal fees cover
£100k tax/fines cover if case lost

I've always been of the opinion that if an insurance company is willing to cover you then your contract is firmly outside IR35, but just curious as to the cost of the extra peace of mind.

Not looking for a debate on whether it is worth it or not...

For a separate £100k indemnity limit for both representation and liabilities, the annual premium is £650. This includes three free contract assessments. You don't need a contract review prior to purchasing cover.

**Troll** · 30 January 2008, 11:03

Originally posted by Qdos Consulting View Post

Sorry, that's not accurate with us.

Representation insurance (our fees in defence of any HMRC enquiry) costs £99 per annum.

TLC35, which covers all IR35 liabilities in addition to all representation, costs £355 per annum. This covers as many contracts as you wish to insure and is fully backdated. The number of contracts under the policy does not affect the premium. As long as you have the policy in place when you receive notice of an enquiry, you will be insured regardless of the contract or period HMRC are looking into.

How does that help in the situation where I startup & closedown companies regularly? how about adding individuals (as long as only 1 company is active at a time) to your policy coverage ?

**MickeyP** · 30 January 2008, 11:06

Originally posted by Qdos Consulting View Post

TLC35, which covers all IR35 liabilities in addition to all representation, costs £355 per annum. This covers as many contracts as you wish to insure and is fully backdated. The number of contracts under the policy does not affect the premium. As long as you have the policy in place when you receive notice of an enquiry, you will be insured regardless of the contract or period HMRC are looking into.

TLC35 also requires that you take a minimum salary of 10k pa.

**Crossroads** · 30 January 2008, 11:16

Originally posted by Qdos Consulting View Post

...stuff...

Cheers for the quick answer. I dare say I'll be in touch sometime in the future...(not for current contract).

**Qdos Contractor** · 30 January 2008, 11:46

Originally posted by Troll View Post

How does that help in the situation where I startup & closedown companies regularly? how about adding individuals (as long as only 1 company is active at a time) to your policy coverage ?

Most of our clients use the same company continuously, so the policy was tailored to suit that majority. You could transfer the policy from company to company, but it obviously wouldn't cover the retrospective contracts. The policy is in your company's name, so if you wanted to cover more than one company you would need more than one policy. We spent a lot of time designing the technicalities of the cover and it seems to work well for our clients.

Not sure I understand your second question. The policy will cover any contracts undertaken through your company, regardless of whether the 'worker' is a director, employee or subcontractor.

**Cheshire Cat** · 30 January 2008, 12:04

Am I understanding this correctly? There is an insurance policy that will pay out not only the legal costs of defending against an HMRC case but also any fines resulting from a defeat? So, complete indemnification against the risk of IR35? Why is every single contractor in the UK not paying this, and then just forgetting about the whole sorry mess. What's the catch?

**dude69** · 30 January 2008, 12:50

Originally posted by MickeyP View Post

TLC35 also requires that you take a minimum salary of 10k pa.

hmm, so a hidden cost.....

£10k/annum salary costs

£10,000 - £105 * 52 = £4,540

£4,540 * 0.11 = £499.40 - employee's NI
£4,540 * 0.128 *.8 = £464.90 - employer's NI, factoring in the 20% CT saving

So another £950 - more than the cost of the insurance.

IR35 Insurance - Cost