IR35 - Back to my old Perm Job as a Contractor? Please help

[northernladuk]

I've done this, left my perm role in October 2011, contracted between October and March 2012 at a different client, then contracted at my old perm place for 6 months.

I did however change my working practices, did work for other clients at the same time as this contract (both myself and the wife as we're both directors of the limited company).

The one thing I found was the client contact (IT Director) didn't understand IR35 (and the consequences to me) and especially when I refused to go on training paid for by the ClientCo, refused to be taken off the project I was working on to "cover support while x perm employee is on training next week".

I lasted 5 months before getting fed up with the

GE

Do did you claim inside IR35?

[ANONYMOUS786]

Thank you QDos - now im going to ask you a question. As looking through the threads some newbies do not understand the cover, like myself

I now Understand the point that your cover is there because even if im compliant and had an investigation, there would be costs associated which you would help for...

Now take the following scenario not leading to what i will do, because im very confused at the moment and want to understand your cover like many others....

Say if, i never approached QDos for advice prior to purchasing the cover, and went ahead and purchased the TLC Insurance, being at high risk or low risk, doesnt matter...

Because, you say that your cover doesnt ask if im 'compliant' right....so after getting insured i go back to my ex employer as a contractor for 6 months.

Tomorrow there is an investigation, the inspector comes to my permy boss and/or a colleague or whatever, and is told that realistically they wouldnt have a substitute, that they would let me off like any other permy employer if i threw their computers out the window by accident etc etc...

Then QDos would defend me? but then if the case is lost by QDos. Who pays for penalties, tax ive owe, NI i owe etc etc?

Your cover is comprehensive and should cover for all, correct?

The fact is that it would be a real struggle to defend someone who had returned to their previous employer, doing exactly the same work. Our TLC insurance doesn't specify that you have to be 'compliant'; IR35 isn't black and white and even with a good contract and seemingly good working practices, there's always going to be a significant risk in the event of an enquiry (HMRC talking to end client, dodgy upper level contract etc).

But we can't cover someone who, on the face of it, has little or no prospects of success.

You could obviously get a more basic tax enquiry insurance policy that simply covered the defence costs. These tend not to be risk assessed.

[northernladuk]

There has to be some due diligence done by you. You can't put yourself clearly inside IR35 and hope to duck the bullet by taking out insurance. You get yourself outside of IR35 and then your insurance will cover you for the greyness of IR35. Insurance isn't there just in case you get found out for being inside and falsely claiming. As a director of a business you have a legal responsibility to understand it and run it properly.

If you cannot be outside IR35 by going back to your old employer then that is that, no amount of insurance will help.

[ANONYMOUS786]

But what "extents" can one go through to put themselves out of IR35 before getting insured?

So in other words, all these people covered by QDos and other insurers are in "doubt" that one day, if they are investigated, they have the risk of QDos saying... well Mr Director, we will not pay out because you didnt take the appropriate measures to ensure your outside IR35 as theres a couple of things you failed to look into, you didnt speak to your employer about x, y and z etc etc

Total peace of mind in never achieved then, is it? IR35 has so many clauses and grey areas that could result in your insurer saying to you, we will not pay out because other this, this and this......

There has to be some due diligence done by you. You can't put yourself clearly inside IR35 and hope to duck the bullet by taking out insurance. You get yourself outside of IR35 and then your insurance will cover you for the greyness of IR35. Insurance isn't there just in case you get found out for being inside and falsely claiming. As a director of a business you have a legal responsibility to understand it and run it properly.

If you cannot be outside IR35 by going back to your old employer then that is that, no amount of insurance will help.

[ANONYMOUS786]

In my case i somehow think i would not be falsely claiming... but thats my opinion and i may be wrong.

Im only required for a max of 6 months, my contract says right to substitute, paying for losses, etc etc. If i take out insurance for "total peace of mind" i would want "total peace of mind", rather than the insurer saying to me tomorrow, "we just spoke to your employer and they possibly wouldnt accept a substitute" and and any other similar scenarios

Who in their right mind would obsessively cover each clause of IR35 with the client? Nobody! Because that would really piss them off. And thats what the insurance is for, for that peace of mind

There has to be some due diligence done by you. You can't put yourself clearly inside IR35 and hope to duck the bullet by taking out insurance. You get yourself outside of IR35 and then your insurance will cover you for the greyness of IR35. Insurance isn't there just in case you get found out for being inside and falsely claiming. As a director of a business you have a legal responsibility to understand it and run it properly.

If you cannot be outside IR35 by going back to your old employer then that is that, no amount of insurance will help.

[northernladuk]

But what "extents" can one go through to put themselves out of IR35 before getting insured?

So in other words, all these people covered by QDos and other insurers are in "doubt" that one day, if they are investigated, they have the risk of QDos saying... well Mr Director, we will not pay out because you didnt take the appropriate measures to ensure your outside IR35 as theres a couple of things you failed to look into, you didnt speak to your employer about x, y and z etc etc

Total peace of mind in never achieved then, is it? IR35 has so many clauses and grey areas that could result in your insurer saying to you, we will not pay out because other this, this and this......

That is a good question. I do personally find it odd that there is no diligence from the insurers so I pay the same price as some one that doesn't have a clue about IR35, gets a contract check that doesn't take in to account working practices and then just buys the insurance. The chances of one guy losing an IR35 case are much higher than me yet I pay the same.


Insurers of all kinds attempt not to pay out at every opportunity so I would expect your example will become reality at some point and can't really blame them if the contractor makes no effort himself.

I am still unsure about all this PI/PL and IR35 insurance marlarky because I don't see any evidence of results. Most of us have had to claim house and car insurance so you know why you pay, even life insurance has paid out from time to time. I see no evidence of contractor insurance paying out so am very sceptical of it all. Yes I have it as we all should but have no faith in it at all.

[ANONYMOUS786]

Im still waiting for QDos to reply because i think i have a very relevant question!!

If i ask my car insurer if they would pay out if they hadd'nt recieved from me information about my licence points, then they would give me a simple answer '''nnnnnnooooo"

But my question is valid, theres only so much i could do... im a contractor, im offered a new contract, qdos have advertised complete peace of mind, and thats the weight i want off my shoulders, so i get insurance, but how do i know, if it will pay me out?

That is a good question. I do personally find it odd that there is no diligence from the insurers so I pay the same price as some one that doesn't have a clue about IR35, gets a contract check that doesn't take in to account working practices and then just buys the insurance. The chances of one guy losing an IR35 case are much higher than me yet I pay the same.


Insurers of all kinds attempt not to pay out at every opportunity so I would expect your example will become reality at some point and can't really blame them if the contractor makes no effort himself.

I am still unsure about all this PI/PL and IR35 insurance marlarky because I don't see any evidence of results. Most of us have had to claim house and car insurance so you know why you pay, even life insurance has paid out from time to time. I see no evidence of contractor insurance paying out so am very sceptical of it all. Yes I have it as we all should but have no faith in it at all.

[garethevans1986]

Do did you claim inside IR35?

Nope, claimed outside IR35.

GE

[Old Greg]

I wonder how many times QDOS has paid out and how many times refused payment.

[ANONYMOUS786]

Well to be fair, if they have refused because of a blatant "heavy lie"....then thats fine e.g. contractor telling QDos that they have substituted before when they havent... etc maybe?

But if HMRC come in to my ex employer and find myself not compliant, e.g. if i go by my agency contract which says i have right to substitute, and later my employer says "maybe not because we require his personal services", then will QDos not cover me????????? similarly if i attend meetings regularly with employees, cover for them whilst they are on training (which may be another requirement from them)

IR35 insurance only ever gets lost if a contractor is not compliant, thats what the insurance is for. So i dont understand this at all!

I wonder how many times QDOS has paid out and how many times refused payment.