Starting work before a contract or incorporation - how bad a screwup?

[TheFaQQer]

Malvolio- just want to be clear on that one, and I think you've probably covered it but just to be sure....

You're suggesting getting the plus PCG membership and rely on their interest in helping you, rather than getting the separate Qdos TLC35?

Is the Hiscox policy you mention a separate (from the PCG Plus membership) policy that's the equivalent to the Qdos TCL35? Or is is the PCG's overall policy that comes as part of the plus membership that they use to fight the battles they want to? I presume there's no guarantee they'll support you in difficulty but one hopes they will (and it's very likely in a landmark case)

And all of the above IR35 insurance is completely separate form the PI insurance (which I've done through Qdos as I wanted to get the contract reviews done quickly as well)

About right?

TLC35 is IR35/tax insurance - it covers any investigation and any penalties / interest charges. Mal believes this is overkill because if you are a PCG member, they will fight any investigation for their members. If they lose, though, you are still liable for the penalties and interest or whatever else HMRC throws at you. Some (myself included) pay the TLC35 for maximum, belt and braces peace of mind. Others (like Mal) don't believe it necessary because the PCG are unlikely to lose.

I've asked in the past (and don't think there is a public answer) whether PCG would just roll over or not.

[malvolio]

Malvolio- just want to be clear on that one, and I think you've probably covered it but just to be sure....

You're suggesting getting the plus PCG membership and rely on their interest in helping you, rather than getting the separate Qdos TLC35?

Depends on your view of the risk. I think it's trivial and TLC35 a waste of money; you're insuring against something that statisically won't happen (else why are the joining criteria so relaxed?). Incidentally you can get similar cover through Abbey via the PCG at much the same cost.

Is the Hiscox policy you mention a separate (from the PCG Plus membership) policy that's the equivalent to the Qdos TCL35? Or is is the PCG's overall policy that comes as part of the plus membership that they use to fight the battles they want to? I presume there's no guarantee they'll support you in difficulty but one hopes they will (and it's very likely in a landmark case)

None of the above. Hiscox are the underwriters behind the Randell Dorling policy for PI, nothing to do with IR35. PCG's investigation insurance is through Abbey Tax.

PCG support all members equally and without qualifications. The only rule is that you aren't under investigation when you join. There is no decision making involved; you get the brown envelope for any HMRC inquiry, you phone the office, you fill out the form, you stop worrying.

And all of the above IR35 insurance is completely separate form the PI insurance (which I've done through Qdos as I wanted to get the contract reviews done quickly as well)

Yep.

As I said earlier the QDOS and Hiscox policies are not offering the same cover which is why the QDOS one is cheaper, although it is more than adequate for us jobbing IT contractors.

But use the PCG resources properly and you will get to the point where you can make your own assessments of IR35 caught or not. The review is only to prove due dililgence if you arne't confident enough to make your own, accurate assessment. Also remeber that reviewing a contract for IR35 compliance is only a tenth of it, you have to look at all the other stuff as well... No point being IR35 proof if they don't have to pay you when there's an R in the month.

[beardedfool]

All clear, it's just another risk vs reward then.

Nice that it covers you on the actual tax but, as I've seen in other threads, Qdos seem to stop it before it gets there as well. So, as you say, I guess it's all down to whether PCG take up your case or not. Will have a think on that one.

[beardedfool]

All clear as day.

Mal - when you say the other stuff you're talking about minor mishaps like starting work before you sign the contract.

Waiting for Qdos to do the full review and will see what the agency says and report back but I'm clear on everything said. Cheers once again all.

[TheFaQQer]

Depends on your view of the risk. I think it's trivial and TLC35 a waste of money; you're insuring against something that statisically won't happen (else why are the joining criteria so relaxed?). Incidentally you can get similar cover through Abbey via the PCG at much the same cost.

I'm not a saleperson for Qdos, by any means, but....

If you buy their TLC35, you get 3 (I think) contract reviews a year for free.

[beardedfool]

It's better than that - Qdos Freelance Club Plus is available free of charge to all of our customers who purchase any of our insurance products.

So you get the reviews with PI insurance, etc etc


So far I've found Qdos to be extremely helpful. You never know until a problem happens with insurance but they (or one lady) have bent over backwards to help me so far

[malvolio]

TLC35 is IR35/tax insurance - it covers any investigation and any penalties / interest charges. Mal believes this is overkill because if you are a PCG member, they will fight any investigation for their members. If they lose, though, you are still liable for the penalties and interest or whatever else HMRC throws at you. Some (myself included) pay the TLC35 for maximum, belt and braces peace of mind. Others (like Mal) don't believe it necessary because the PCG are unlikely to lose.

I've asked in the past (and don't think there is a public answer) whether PCG would just roll over or not.

Ask Geoff Jones... PCG don't do rolling over.

PCG (i.e Abbey/Accountax) have lost one case, several years ago. They've won the other 1500 or so.

There won't be penalties if you have had a contract review (or can demonstrate you are competent to judge things for yourself). Tax owed might look frightening but you have to deduct the CT and PAYE/NICs already paid out if you lose. There have been 35 IR35 investigations in the last two years, none sucessful.

But it's a risk assessment. This is 2011, not 2002 and I'm happy with my version of it. YMMV.

[malvolio]

. So, as you say, I guess it's all down to whether PCG take up your case or not. .

They will. No discussion. Full stop.