Cover for tax investigation, facts?

[BolshieBastard]

£99 for representation only, or £355 for representation and IR35 liabilities. You can pay monthly at no extra cost & all cover is fully retrospective.

You only cherry pick those contracts that suit though dont you? I mean if I submitted say a standard Parity contract, you wouldnt cover it would you unless loads of changes where made by the agency (who'd probably say they cant change their T&C's).

Then, in any HMRC investigation you'd argue my limited co's contract differed from the client \ agent contract and refuse to pay out. But you wouldnt refund my £355 either!

[Fred Bloggs]

You only cherry pick those contracts that suit though dont you? I mean if I submitted say a standard Parity contract, you wouldnt cover it would you unless loads of changes where made by the agency (who'd probably say they cant change their T&C's).

Then, in any HMRC investigation you'd argue my limited co's contract differed from the client \ agent contract and refuse to pay out. But you wouldnt refund my £355 either!

Hmmm, it's easy to be cynical, I often am.

As I understand it, I filled in a proposal form from QDOS that asked questions about my working practices. They accepted the risk on that basis. Surely, if I carry on working in the way that I stated on the proposal, then QDOS will cover me?

I jacked a job last year after 6 weeks that was certainly IR35 caught despite a decently worded contract due to the "expectations" of the client manager who wanted an "integrated team member" not a contractor IMO. Had I stayed there pretending to non-IR35 it would have been unreasonable to expect QDOS to cover that role?

[eazy]

Tax Cover

i.e. if you lose in court they won't pay out.
sounds like money for old rope this insurance malarkey

I tend to agree with you, I have never heard of any of the various Tax Cover insurance providers (Qdos, Accountax, Abbeytax, lawspeed etc) paying out.

They will only cover you if your contract & working practices are outwith IR35. If you are outside according to experts, then why do you need tax liability cover. If you are found to have embellished your answers regarding your working practices or your client contradicts you at the commissioners, your cover is probably worthless.

The cost of having every contract reviewed (including all the previous ones over the last six years) can be quite high and may still not have peace of mind.

I only have tax investigation cover (PCG+), which is 220+VAT. This is does not require your contract to be reviewed. However, I would suggest having contracts reviewed by professionals is not a bad thing and you should always be looking to ensure have best contract wording & practices.

I would strongly recommend Tax Investigation Cover since cost of investigations can be quite high. Typical investigation costs are :-

Aspect Enquiries : £500
PAYE : £500 - £1000
IR35 : £1000 - £2000
Commissioners : £3000 - £5000

So in summary, tax investigation cover (e.g. PCG+ at 220+VAT) is a no brainer.

[Qdos Contractor]

You only cherry pick those contracts that suit though dont you? I mean if I submitted say a standard Parity contract, you wouldnt cover it would you unless loads of changes where made by the agency (who'd probably say they cant change their T&C's).

Then, in any HMRC investigation you'd argue my limited co's contract differed from the client \ agent contract and refuse to pay out. But you wouldnt refund my £355 either!

No, because we don't review the contracts as part of the risk assessment procedure.

In the 1000+ enquiries we have dealt with, there hasn't been an occasion where we've refused to cover someone because of incorrect information on a proposal form.

[Qdos Contractor]

As I understand it, I filled in a proposal form from QDOS that asked questions about my working practices. They accepted the risk on that basis. Surely, if I carry on working in the way that I stated on the proposal, then QDOS will cover me?

Absolutely right. I can't stress enough that we would never look for an escape route if someone claimed on the policy. There are hundreds of satisfied, relieved clients who will testify to that.

[Qdos Contractor]

I tend to agree with you, I have never heard of any of the various Tax Cover insurance providers (Qdos, Accountax, Abbeytax, lawspeed etc) paying out.

That's because we've never lost an insured case, not because we've rejected any claims.

They will only cover you if your contract & working practices are outwith IR35. If you are outside according to experts, then why do you need tax liability cover. If you are found to have embellished your answers regarding your working practices or your client contradicts you at the commissioners, your cover is probably worthless.

Again, we don't look at the contract. Just the working practices. And HMRC are unlikely to agree with the experts.

The risk of your client contradicting you is one of the reasons you would want this type of policy in place. That's the way most IR35 enquiries are lost. We certainly wouldn't pull out because of that.

The cost of having every contract reviewed (including all the previous ones over the last six years) can be quite high and may still not have peace of mind.

We don't review the contracts, so no charges. Once you have the policy we'll review up to 3 different contract free of charge (the result of which will not have an impact on the insurance).

[Fred Bloggs]

Thanks QDOS, the fact that you are prepared to go on the record in here means a lot regarding your credibility IMHO.

[whattodo]

Thanks for all the clarification QDOS, i'd be greatful if you could answer a few more though! (And anyone else feel free to chip in about benefits of the other alternatives like PCG+ membership). I'm sure I'll get some kind of cover, i'm just a bit torn over what to get. I'm really just looking to cover myself in case a bully with deep pockets starts giving me a hard time!

Could I ask what sort of working practices generally exclude a contractor from the TLC35 cover? And do you sign up for it before you're asked these questions? I'm just wondering if i'd be covered anyway, and if the practices in question are likely to change from contract to contract.

I also asked whether an investigation by HMRC had to relate to an ongoing contract to be covered, or if having the insurance covers all investigations started once it has begun, regardless of what contract is focused on? E.g. a contract years ago.

Oh, and lastly, I think already know the answer to this, but wanted to check. The insurance is for the business rather than the individual, so it's paid for by the limited company, correct?

I checked out the terms and conditions, and there's a fair bit of small print in there. I'm no legal expert but i'd hope what was said above is true, that nobody is left high and dry.

[Qdos Contractor]

Could I ask what sort of working practices generally exclude a contractor from the TLC35 cover? And do you sign up for it before you're asked these questions?

There are about 20 yes or no questions covering all the key issues. The most important are substitution (i.e. could you send a suitable alternative in your place), control (do you have control over your method of work) and mutuality of obligation (are you obliged to provide ongoing services, length of notice period etc).

You fill in the form before you sign up for the policy. You can do it online and there are no obligations to pay for anything at any point. Feel free to put through a test order.

I also asked whether an investigation by HMRC had to relate to an ongoing contract to be covered, or if having the insurance covers all investigations started once it has begun, regardless of what contract is focused on? E.g. a contract years ago.

The insurance is fully retrospective, so as long as you have the policy in place when you receive notification of an enquiry you'll be covered, regardless of the period or contract HMRC are looking into. Providing each engagement is ok working practice-wise you can cover as many contracts as you want. The premium will always stay the same.

Oh, and lastly, I think already know the answer to this, but wanted to check. The insurance is for the business rather than the individual, so it's paid for by the limited company, correct?

The policy is in the company's name, yes. It will cover representation costs in respect of any individual enquiries into directors.

I checked out the terms and conditions, and there's a fair bit of small print in there. I'm no legal expert but i'd hope what was said above is true, that nobody is left high and dry.

PM me or drop us an email if there are any specific terms you are concerned about. Bear in mind that we're a tax consultancy first and foremost - we offer policies on the back of our expertise. We've been fighting IR35 since the very beginning and are not in the business of rejecting claims.

I'm going to the pub now. I try to escape from IR35 at weekends!

[BolshieBastard]

Sorry, there's still some conflicting information here. You dont review the contract but instead rely on the contractor answering 20 or so yes \ no questions. Even if the contractor is totally honest, the client and hmrc may have a different interpretation on the actual circumstances.

And you reckon you've never lost (or only lost 1 or 2) IR35 investigations on that basis? I find it extremely difficult to believe you've never lost a case based on the 20 or so yes \ no questions as HMRC can literally ask a hundred or more!