IR35 Insurance - is it worth it?

[aikidoka]

I've been contracting for 3 years now, with most of my work with one very good client. Although I've ensured my contract is IR35-friendly, and my working practices are those of company-client as opposed to an Employee. I suspect that my company is currently under the microscope as I've just received a cheque for overpayment of NIC.

I've not received any formal notification or any real indication that my company is under investigation, but this cheque has made me very wary.

Is it worth taking out IR35 insurance at this point? or is it a case of closing the gate after the horse has bolted?

Thanks for any advice.

[northernladuk]

I've been contracting for 3 years now, with most of my work with one very good client. Although I've ensured my contract is IR35-friendly, and my working practices are those of company-client as opposed to an Employee. I suspect that my company is currently under the microscope as I've just received a cheque for overpayment of NIC.

I've not received any formal notification or any real indication that my company is under investigation, but this cheque has made me very wary.

Is it worth taking out IR35 insurance at this point? or is it a case of closing the gate after the horse has bolted?

Thanks for any advice.

Why would you getting back what you are due make you think you are under the microscope. This is a pretty standard process and I think we would be all very angry if there wasn't a process to get money back that is owed to us. I think you are worrying over nothing for this.

You could have your contract checked by QDOS or Baur and Cotterel (don't know exact spelling) and read up on IR35 for peace of mind if you are worried. You could also have a look at PCG membership and it's benefits.

[Greg@CapitalCity]

I would suspect your cheque is completely unrelated to any form of investigation. Did you accidentally overpay your NIC's?

In my opinion the IR35 insurance is worth having. Its a small price to pay for piece of mind, and if problems with the HMRC did arise, you would want to engage the services of a specialist (and that would cost you several thousand pounds). The insurance is only around £100 per year.

[SueEllen]

I've been contracting for 3 years now, with most of my work with one very good client. Although I've ensured my contract is IR35-friendly, and my working practices are those of company-client as opposed to an Employee. I suspect that my company is currently under the microscope as I've just received a cheque for overpayment of NIC.

Things like that are sent out automatically.

I've not received any formal notification or any real indication that my company is under investigation, but this cheque has made me very wary.

Is it worth taking out IR35 insurance at this point? or is it a case of closing the gate after the horse has bolted?

If your contract and working practises are clearly outside IR35 then in theory you have no need to worry however HMRC launch PAYE investigations randomly and if you keep contracting for the same one client then it may be a good idea to have some insurance.

You can either get QDOS insurance or you can join the PGC, a lobby group. A benefit of PGC membership is IR35 insurance.

[Support Monkey]

you only need car insurance if your going to have an accident

you only need house insurance if your house burns down

It one of lifes eternal questions do we need insurance, who knows???

[contractoralan]

you only need car insurance if your going to have an accident

you only need house insurance if your house burns down

It one of lifes eternal questions do we need insurance, who knows???

Car and home insurnace are often mandatory legally and/or contractually. IR35 insurance cannot be compared to these.

You could compare IR35 insurance with a mobile phone insurance.You do not just buy the phone insurance because your sales person says. You consider whether it is worth it. by considering the handset make/model, your monthly plan, price of the policy, how and when can you claim, what is covered etc. etc.

Though I agree with Greg's "IR35 insurance is worth having" comment, I think the question "Is IR35 insurance worth it" is a sensible one.

[aikidoka]

Thanks for the swift responses.

I've done some digging, and yes as Greg suggested, it was an overpayment, or rather a discount for filling in online that my accountant couldn't offset against anything... hence the cheque.

I was just being paranoid... I'm not used to HMRC *giving* me some money!

The comparisons to all insurances are also valid... I've been paying my business insurance for all the time I've been contracting, but it wasn't until my mobile phone was stolen that I have ever needed it. Given the cost of a new phone, I was definitely grateful it was there!

I think I will definitely look into the insurance and PCG membership, if only for the peace of mind it provides.

Thanks once again

[Support Monkey]

Car and home insurnace are often mandatory legally and/or contractually. IR35 insurance cannot be compared to these.

You could compare IR35 insurance with a mobile phone insurance.You do not just buy the phone insurance because your sales person says. You consider whether it is worth it. by considering the handset make/model, your monthly plan, price of the policy, how and when can you claim, what is covered etc. etc.

IR35 can be compared to any insurance The only legaly required insurance is motor so any other insurance is taken out using the same critera you have given for selecting mobile phone insurance.

Insurance is to cover thing that might happen, it all comes down to your personal view of risk whether you actually need it or not