IR35 Insurance / QDos Consulting

[SteelyDan]

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).

Do you know this for sure? Are you one of their customers and you know the answer to these points?

I think I'll reserve judgement until someone from QDos posts back on this, but until then I think I'll sit in the 'someone has created an industry based on the inherent fear which IR35 brings to contractors' camp

[malvolio]

The point is that if you qualify for back taxes insurance you almost certainly don't need it or they wouldn't accept the risk. There is a vague chance that you may lose an investigation due to some weird re-interpretation of the case law but that risk, given you follow the advice on working practices and have decent representation from the start, is vanishingly small.


I don't think any of the insurers or PCG will give up on a case at the first hurdle; if it's worth defending they will all take it to its natural conclusion.


It's also worth looking at the money HMRC have recovered from last year's 235 cases. That come out at around £5k each. Not trivial, but it's not going to ruin you either. Dunno about you but carrying insurance against the tiny chance that I lose a small proportion of my warchest isn't going to float my boat.

[Zero Liability]

Are the amounts that small due to HMRC choosing to settle or what?

[MPwannadecentincome]

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

Interesting, so is the onus on the contractor to ask the agency if there are discrepenancies or is ignorance of the facts having not asked sufficient?

[jamesbrown]

Do you know this for sure? Are you one of their customers and you know the answer to these points?

I think I'll reserve judgement until someone from QDos posts back on this, but until then I think I'll sit in the 'someone has created an industry based on the inherent fear which IR35 brings to contractors' camp

Do I know what for sure? My statement was patently an opinion. It stands to reason that they'd make every effort to follow a case to its conclusion, as their reputation depends on it. Insurers profit from policies that are claim-free, which relies on an impression that the insurance is worthwhile. They aren't going to risk that unless there really is very little chance of success.

[northernladuk]

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.

Where did you hear that?

IR35 Guide - Contractor Weekly

The right of substitution is one of the strongest tests of self employment as shown in the case of Echo and Express Publications v Tanton (1999).

It can be seen as a sham and ignored though so having it in the contract isn't the silver bullet

IT contractors warned on IR35 substitution clauses :: Contractor UK

[Qdos Contractor]

I think I've covered a lot of these questions before (although I understand why they are raised often).

There was a very similar thread here.

As someone has already alluded to, if we started throwing out cases left, right and centre it wouldn't do much for our reputation. We've had a noticeable increase in enquiries recently so our defence team are very busy at the moment. As ex-HMRC inspectors, that's exactly how they like it.

I'm around all day so feel free to fire any questions at me.

[Contreras]

I'm around all day so feel free to fire any questions at me.

Alrighty then...

Freelancer Tax Protection is a tax enquiry insurance providing you with expert defence in the event of any HMRC enquiry, including IR35. One of our consultants will handle all correspondence with HMRC from start to finish, so you can be safe in the knowledge that you have an expert fighting your corner.

Is this, broadly speaking, the same level of legal representation cover in the event of a tax investigation that one could get via PCG+ membership? I.e. brown envelope falls on door mat, for any tax enquiry not just IR35, you call up QDOS and their experts deal with HMRC on your behalf - the contractor never has to speak to HMRC.

In the event that a PAYE enquiry progressed to an IR35 investigation - if it was felt that the case was a lost cause then what happens next? Presumably the contractor would be advise to settle with HMRC, but what if he/she wanted to battle it through?... Would QDOS still cover for legal representation in this case?

For the avoidance of doubt I am not asking about tax liability cover.

[Qdos Contractor]

Alrighty then...

Is this, broadly speaking, the same level of legal representation cover in the event of a tax investigation that one could get via PCG+ membership? I.e. brown envelope falls on door mat, for any tax enquiry not just IR35, you call up QDOS and their experts deal with HMRC on your behalf - the contractor never has to speak to HMRC.

Yes, same type of cover.

In the event that a PAYE enquiry progressed to an IR35 investigation - if it was felt that the case was a lost cause then what happens next? Presumably the contractor would be advise to settle with HMRC, but what if he/she wanted to battle it through?... Would QDOS still cover for legal representation in this case?

We would have to weigh up the 'prospects of success'. If it was clear that the chances of winning the case were negligible then we would have a duty to our insurers not to continue with the claim. This is covered on page six of the policy wording (pdf doc).

It is important, however, to point out that this is highly unlikely to happen. In over 10 years of dealing with the policy, I can't think of any instances involving contractors where we've invoked this condition.

[DirtyDog]

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?

Maybe this has changed, but when I renewed mine last year, there was a list of my contracts (which they have reviewed as part of the service) which would be covered.

Since I'm still in the same contract as last year, I haven't checked again to see if this is still the case, though.