Hmrc ir35 tax yield figures - taking freelancers as mugs

[GeekyGrandad]

Tax insurance still required

Dear Tarbie,
What? You dolt!

The tax insurance covers all tax investigations. A bog standard compliance check, and there are a lot more of them happening per year than IR35, handled by your accountant will cost you nearly 10 times the PCG insurance cost (cirrca £2000).

[v8gaz]

It may sound odd to a hardened contractor but a lot of people can't live with the fear of a 6 year retrospective IR35 inquiry which would mean that they could be landed with a big tax bill which would make them lose their house. So they prefer to take the safe option and declare their income as IR35 caught and live a quiet life.

So you buy the insurance, join PCG and get on with running a business. I'm finding it difficult to see why anyone would co contracting long term via an umbrella - all of the risks, none of the benefits. Why not just go permie and get all the additional benefits and (limited) security that gives you?

[cojak]

Right, I see! This is a disguised 'Join the PCG, you dolt' thread - it all becomes clear!

Bored of your own forum lads or are you on holiday?

[malvolio]

Right, I see! This is a disguised 'Join the PCG, you dolt' thread - it all becomes clear!

Bored of your own forum lads or are you on holiday?

No, Tarbie is actually a dolt. But we love him.

[centurian]

So you buy the insurance, join PCG and get on with running a business.

Insurance isn't guaranteed to be offered. I suspect some will stretch the truth about their working practices in order to get accepted (which effectively means they don't have insurance)

And insurance isn't guaranteed to be around for years 2-6.

It offers for a slightly better night's sleep, but for the risk adverse - not much.

[malvolio]

Insurance isn't guaranteed to be offered. I suspect some will stretch the truth about their working practices in order to get accepted (which effectively means they don't have insurance)

And insurance isn't guaranteed to be around for years 2-6.

It offers for a slightly better night's sleep, but for the risk adverse - not much.

PCG insurance is unconditional provided you are not already under investigation when you join.

Simple enough, isn't it?

[v8gaz]

Insurance isn't guaranteed to be offered. I suspect some will stretch the truth about their working practices in order to get accepted (which effectively means they don't have insurance)

And insurance isn't guaranteed to be around for years 2-6.

It offers for a slightly better night's sleep, but for the risk adverse - not much.

What the hella re you talking about? As Mal says, anyone gets insured under PCG, and with figures in the order of 1450 wins to 6 losses, where the losss were in large amount down to the victim trying to represent themselves agaisnt all advice, then I would say that is pretty re-assuring.

Given that there are now considerably fewer investigations going on, I'm staggered that you think anything has got harder - quite the reverse!

Oh, and yes, Tarbie is a dolt.

[centurian]

Given that there are now considerably fewer investigations going on, I'm staggered that you think anything has got harder - quite the reverse!

I never said anywhere in any of my posts - that it is any easier or harder - just merely pointing out that some people are quite risk adverse to the point that they just want to sleep well at night. If you're not one of those people then congratulations - but not everyone is like you.

Also insurance is not an absolute guarantee of safety. It covers you for investigations started within the next 1 year - you need cover for the next 6 years.

If HMRC start getting really nasty and QDOS/PCG (or anyone else) lose multiple cases with shed-loads of 6 figure payouts - then make no mistake, the underwriters will honour their current commitments, but withdraw from the marketplace. The following year, you will not be able to get your insurance renewed, which will be exactly at the point that the HMRC wolves are more likely come knocking.

Is this scenario likely, no, not at all - quite the opposite in fact. But don't think that insurance provides a 100% cast iron guarantee.

[v8gaz]

I never said anywhere in any of my posts - that it is any easier or harder - just merely pointing out that some people are quite risk adverse to the point that they just want to sleep well at night. If you're not one of those people then congratulations - but not everyone is like you.

Also insurance is not an absolute guarantee of safety. It covers you for investigations started within the next 1 year - you need cover for the next 6 years.

If HMRC start getting really nasty and QDOS/PCG (or anyone else) lose multiple cases with shed-loads of 6 figure payouts - then make no mistake, the underwriters will honour their current commitments, but withdraw from the marketplace. The following year, you will not be able to get your insurance renewed, which will be exactly at the point that the HMRC wolves are more likely come knocking.

Is this scenario likely, no, not at all - quite the opposite in fact. But don't think that insurance provides a 100% cast iron guarantee.

Jesus, how do you ever manage to man up enough to cross a road?

[dx4100]

Jesus, how do you ever manage to man up enough to cross a road?

When I was weighing up the pros and cons of surrendering my hard earned money to the silliness and unfairness of IR35 I came to realisation that I could have my cake and eat it.

If you are risk adverse, which I appreciate as I also have little interest in taking risks which could result in me losing my home specially with a young one, you could always do the following. Get the PCG coverage, pay out for the Tax loss insurance, pay out for the contract reviews, and then take home pretty much what you would get under IR35 and leave the rest sat in your business account. Then release it when you close the business and or the six years is up (isn't it in reality 2 years for various reasons once the company has been closed ?)

If hector wants the money then they can fight you for it (or in other words the lovely legal people courtesy of the PCG) while you always have the piece of mind that you can cover the tax losses with you own cash if every goes to tulip.

Am I missing something or is that not the best approach for the risk adverse ? Much more sense than the Umbrella route.