IR35 Insurance / QDos Consulting

**Martin at NixonWilliams** · 19 December 2013, 17:10

Originally posted by arthurwesley View Post

Hello all

This is a question about the IR35 insurance offered by the likes of Qdos Consulting

I'm assured by Qdos that any costs and taxes associated with an IR35 judgement going against me however things just don't add up... it all seems to good to be true.

Confusion 1: Will Qdos pay all my back taxes if the investigation goes against me? i.e. I will not be out of pocket (other than then insurance premium?)

Confusion 2: There was no demand for my contract, or conversation with me, my agent, accountant or end client - so how does Qdos know how much IR35 risk there is? surely adverse selection comes into play here?

Can anyone clear this up for me?

It's not too good to be true, all backdated tax and NI is covered as part of the insurance.

Your IR35 status is based on your contract and working practices. QDOS will review your contract and assess the likelihood of being caught based on your contract alone.

Note that even if your contract is IR35 friendly, if the working practices do not reflect what is written into the contract then you can still be caught.

I hope this helps.

Martin

**northernladuk** · 19 December 2013, 17:23

Don't forget to look at the PCG+ offering as well. It's not technically an insurance but part of the membership.

Quite a few threads asking how many times they have had to pay out and the like but I don't think it's heavily used. If they do start ramping up I am sure we will see prices changing to reflect the amount of risk per person just like any other insurance. I would hope they tighten the criteria as well so that there is a strong emphasis on the contractors to do their own diligence and not have QDOS spending their money chasing investigations that are in a bad way due to contractors just not bothering to help themselves.

That's my guess anyway.

**BillHicksRIP** · 19 December 2013, 17:43

Interested in this too. I enquired about the TLC35 Cover on their website but was simply asked to confirm the following statements were true. No request to see the contract and no discussion, bar a pointer email confirming the elements I already knew about. When I queried this I was told I can purchase the insurance as long as I can confirm the statements are true. It will ultimately be down to me, but I do need some expert advice of whether my position is defendible at all.

· You have not been subject to a VAT, PAYE or NIC inspection and/or an HMRC enquiry into your self-assessment tax return (personal and/or corporate) in the last three years.

· You are able to exercise a Right of Substitution

· You have autonomy over your method of work and are not subject to the same level of supervision or control as your clients’ employees.

· Your company currently carries, or you will look to purchase business insurances, such as Professional Indemnity, Employers/Public Liability.

· You are not aware of any discrepancies between your company’s contract with your agency and your agency’s contract with your end client.

· You have not been employed (either directly or via an Umbrella Co) by any of your clients in the 12 months prior to commencing work under a contract for services.

**jamesbrown** · 19 December 2013, 17:44

Check the conditions under which they pay out, such as having a reasonable chance of successfully defending the case.

**SteelyDan** · 19 December 2013, 17:52

Originally posted by BillHicksRIP View Post

Interested in this too. I enquired about the TLC35 Cover on their website but was simply asked to confirm the following statements were true. No request to see the contract and no discussion, bar a pointer email confirming the elements I already knew about. When I queried this I was told I can purchase the insurance as long as I can confirm the statements are true. It will ultimately be down to me, but I do need some expert advice of whether my position is defendible at all.

· You have not been subject to a VAT, PAYE or NIC inspection and/or an HMRC enquiry into your self-assessment tax return (personal and/or corporate) in the last three years.

· You are able to exercise a Right of Substitution

· You have autonomy over your method of work and are not subject to the same level of supervision or control as your clients’ employees.

· Your company currently carries, or you will look to purchase business insurances, such as Professional Indemnity, Employers/Public Liability.

· You are not aware of any discrepancies between your company’s contract with your agency and your agency’s contract with your end client.

· You have not been employed (either directly or via an Umbrella Co) by any of your clients in the 12 months prior to commencing work under a contract for services.

So if you can't meet all these criteria, they won't let you join? As far as I'm aware RoS is not significant in determining status, and neither is holding those insurances.

**BillHicksRIP** · 19 December 2013, 17:54

The way it was conveyed to me was I'm welcome to buy the insurance if I'm happy all of the statements are true. Not sure what happens if what I thought was true, to the best of my knowledge, turns out to be incorrect. Policy tore up? I just don't know.

**SteelyDan** · 19 December 2013, 18:04

Originally posted by BillHicksRIP View Post

The way it was conveyed to me was I'm welcome to buy the insurance if I'm happy all of the statements are true. Not sure what happens if what I thought was true, to the best of my knowledge, turns out to be incorrect. Policy tore up? I just don't know.

As ever, devil in the detail, n'est ce pas? A bit like any insurance; you only find out how good/effective it is when you come to make a claim.

I think I'd want to know the answers to the last bit (in bold)...yes we've taken your money (thanks BHRIP), no you weren't covered as you stated inaccuracies when you took it out, no we didn't feel the need to check the accuracy of any of what you said at the time, no we're not paying out, but thanks for showing an interest in our products...?

**jamesbrown** · 19 December 2013, 18:24

Originally posted by SteelyDan View Post

As ever, devil in the detail, n'est ce pas? A bit like any insurance; you only find out how good/effective it is when you come to make a claim.

I think I'd want to know the answers to the last bit (in bold)...yes we've taken your money (thanks BHRIP), no you weren't covered as you stated inaccuracies when you took it out, no we didn't feel the need to check the accuracy of any of what you said at the time, no we're not paying out, but thanks for showing an interest in our products...?

It's a fair point but, in practice, I think Qdos would make every effort, as their reputation relies on it. That said, it is worth understanding the conditions that need to be satisfied in order for a case to be pursued and insurance paid. If a case is worth pursuing, it's unlikely to fail, but a case will only be pursued if there's a reasonable chance of success (note that PCG have different criteria, as they aren't in the insurance business).

**Zero Liability** · 19 December 2013, 18:34

Originally posted by BillHicksRIP View Post

The way it was conveyed to me was I'm welcome to buy the insurance if I'm happy all of the statements are true. Not sure what happens if what I thought was true, to the best of my knowledge, turns out to be incorrect. Policy tore up? I just don't know.

I would get the salesperson to ensure one of their IR35 consultants advises you on aspects you are unclear on, so you don't fall in the situation where you're reliant on your interpretation of it being accepted so that they pay out, like Steelydan said. Best to do due diligence early on.

Part of the reason it is so cheap is IR35 investigations barely comprise 0.1% of the contractor pool, if HMRC's figures are to be believed. It's not like they're taking any huge risks. Also bear in mind, if you are reasonably sure your contract will pass at least on one of the three key tests, you can submit it to Accountax, whose IR35 Guarantee covers the contract itself rather than annual protection.

If I were to re-do things over again, I would've gone with Accountax from the beginning.

Also, from correspondence I've had with Qdos on here, they've confirmed they would risk-assess and settle if they felt there was little chance of winning. The only case in which they would not pay out is where you either lied (or I guess answered their questions without fully understanding them, such that your answers were not reflective of your situation) or if the inquiry arose from something like fraud, or you not doing your accounts properly. They would not risk-assess and then just drop you for being hard to defend, or else their cover wouldn't be worth the paper it is written on. That sort of assessment should be done at the point of sale of the policy and if your circumstances change.

I'd disagree on ROS not being important, however, but it depends on what changes are coming for PSCs providing services through an intermediary.

IR35 Insurance / QDos Consulting