"IR35 tax is a huge failure"

[crack_ho]

How many times has this type of insurance paid out?
I cannot see how this type of insurance would ever have to pay.

The contractor fills out the insurance questionannaire honestly stating working practice X (e.g. no direct control).
The contractor is investigated and loses on the basis of X.
The insurance company then turns around and says you were not honest about X we won't be paying you.

So you have lost the investigation, you have to pay the tax and fines and you also gave away some extra cash in premiums.

[malvolio]

How many times has this type of insurance paid out?
I cannot see how this type of insurance would ever have to pay.

The contractor fills out the insurance questionannaire honestly stating working practice X (e.g. no direct control).
The contractor is investigated and loses on the basis of X.
The insurance company then turns around and says you were not honest about X we won't be paying you.

So you have lost the investigation, you have to pay the tax and fines and you also gave away some extra cash in premiums.

I've made that point several times over the years - you are insuring against a risk that the insurers are almost guaranteeing won't happen. However, the problem is the word "almost"; there are no certainties with HMRC and some think the additional protection necessary. It's a trade off betwen operating profit and comfort. As we have seen in recent cases, the client is just as likely to stitch you up by denying the contractual content and working arrangements as anyone.

[Lewis]

How many times has this type of insurance paid out?
I cannot see how this type of insurance would ever have to pay.

The contractor fills out the insurance questionannaire honestly stating working practice X (e.g. no direct control).
The contractor is investigated and loses on the basis of X.
The insurance company then turns around and says you were not honest about X we won't be paying you.

So you have lost the investigation, you have to pay the tax and fines and you also gave away some extra cash in premiums.

This has been debated so so so many times on other threads. The insurance has never paid to date as QDOS have not lost for a TLC35 client to date. But IR35 is never clear cut, being able to answer a basic questionarie that I reckon the vast majority of contractors can answer ok, in no way means you are safe, as QDOS have said, getting back stabbed by the client seems to be happening a lot now. For less than a days pay I feel much happier having the insurance in place. If they lose and if they don't pay out then their business is over - everyone with TLC35 will stop their policies, QDOS have always been helpful and proactive, I for one have no reason to doubt them. Of course if they lose a lot all in a row maybe they will withdraw the product, who knows?, but until that happens I am keeping the insurance.

[Fred Bloggs]

Sad to say really, but I regard my QDOS policy as an essential cost of doing freelance business in the UK. It's sad because I'm effectively insuring myself against the actions of our own elected government.

[poppy01]

Sad to say really, but I regard my QDOS policy as an essential cost of doing freelance business in the UK. It's sad because I'm effectively insuring myself against the actions of our own elected government.

'elected' government

[Hex]

Insurance is a product which is of best use when insuring against something that is very unlikely to happen, but if it did happen it would cause a lot of hardship.

Nowadays insurance is also available for things that are much more likely to happen. In these cases the insurance premiums are high (relatively) to reflect the likelihood of a claim occuring. This partially negates the value of the insurance as the cost of the premiums can quickly outweigh the benefits a claim may give. This doesn't stop insurance companies selling these policies mind - after all they make quite a lot of money from the high premiums.

IMHO it is only worth taking out insurance for things that are very unlikely to happen but if they did they would cause me a lot of hardship. The premium paid in these cases is a small price to pay for the peace of mind.

I take out IR35 insurance that will pay my taxes, interest and penalties in the unlikely event that I have to pay them. The potential liability for this could be life changing for me and I'd rather have insurance to cover it. I don't take out an extended warranty on my washing machine as I can replace it relatively painlessly myself if it does breakdown, and the money I save by not taking out extended warranties can be used to replace any item if it does breakdown.

It all comes down to your individual attitude to risk and to how life changing you think an unlikely event may be and how much you care. But taking out insurance on things that are unlikely to occur is very valid for a lot of people.

[dx4100]

If they lose and if they don't pay out then their business is over - everyone with TLC35 will stop their policies

When all is said and done this is very true... The people you have the insurance more than likely use these boards. I would imagine we would find out very quickly if their is a case of none payout and everyone would very seriously review if they would continue with their premiums.

I have always had the insurance. I answered the questions honestly. That dosent mean I wont get stiffed somewhere along the line. If I do I would expect my insurance company to pay.

If it is true their has only be six losses I would imagine the insurance companies are unlikely to be brought down by a couple of claims.