Tax avoidance insurance

[centurian]

Surely we have seen the adverts claiming that the 80% guaranteed take home is insurance backed, often Lloyds backed, so you cannot possibly lose. The recent one involving Gary Barlow was insurance backed, so he should be fine, right?

Icebreaker threatens to sue Deloitte | AccountingWEB

Taylor adds: "Based on correspondence from the insurers solicitors, it is clear that the insurer believes it was not provided with the relevant information. The insurer has voided the scheme and agreed to repay the premiums.

Given that most avoidance schemes at this end of the scale are on such a knife-edge legal wise, presumably insurers can pull this stunt whenever a scheme gets defeated.

So the insurance is like an umbrella which only works when the sun is shining.

[JoJoGabor]

That's my view also. When I looked at IR35 insurance you basically had to sin that you were outside of IR35, but surely if you are found by HMRC to be inside, then the insurance company will take the same view that your application was void?

[malvolio]

That's my view also. When I looked at IR35 insurance you basically had to sin that you were outside of IR35, but surely if you are found by HMRC to be inside, then the insurance company will take the same view that your application was void?

So join PCG. Cover is unconditional.

Unless you're talking about insurance to cover the extra tax arising from losing a case - which I've said for years is probably a waste of money.

[kal]

So join PCG. Cover is unconditional.

Unless you're talking about insurance to cover the extra tax arising from losing a case - which I've said for years is probably a waste of money.

Because they will come up with some reason not to pay out I take it?

[speling bee]

Because they will come up with some reason not to pay out I take it?

The question is: has it ever paid out?

[malvolio]

Because they will come up with some reason not to pay out I take it?

No - it's because the insurer will make pretty damn sure you aren't caught before offering you the cover. If you want to insure against something that the insurer is convinced won't happen then go ahead.

There's another potential twist, come to that. If a reviewer says you are outside and you arrange your affairs accordingly, then you lose a case and have to pay out the back taxes, why wouldn't you then sue the advisor for the losses since it was their bad advice that created them?

[speling bee]

No - it's because the insurer will make pretty damn sure you aren't caught before offering you the cover. If you want to insure against something that the insurer is convinced won't happen then go ahead.

There's another potential twist, come to that. If a reviewer says you are outside and you arrange your affairs accordingly, then you lose a case and have to pay out the back taxes, why wouldn't you then sue the advisor for the losses since it was their bad advice that created them?

Because any wise adviser would caveat their advice.

[cojak]

Because any wise adviser would caveat their advice.

...and ultimately the final decision always resides with the purchaser. Advice is exactly that - advice (just ask any accountant/lawyer).

Although in the past we've had promoters on here laugh at the 'armchair warriors' on the forum, telling punters to ignore us and rely on the advice of 'tax specialists'; those specialists aren't the ones getting bitten on the bum today.

[Maslins]

The question is: has it ever paid out?

Last time I spoke to QDOS about this (admittedly a little over a year ago) they said they'd never had to pay out on their TLC35 insurance...and perhaps more interestingly that they really wanted to.

Their attitude (believe it or not...I do) was that the cost of having to pay out on the policy would be dwarfed by the positive PR and additional sign ups they'd likely get afterwards.

Having said that, I agree with Malvolio's stance, that they will do some due diligence on you before accepting you onto the policy. If they're confident you wouldn't stand a chance in an IR35 enquiry, they'd be highly unlikely to offer the insurance (or insist on significant changes in your contract/working practices first)...but surely that's a good thing? At least you as punter know nice and early on you're high risk, whilst otherwise you might've been blissfully ignorant.

[speling bee]

Last time I spoke to QDOS about this (admittedly a little over a year ago) they said they'd never had to pay out on their TLC35 insurance...and perhaps more interestingly that they really wanted to.

Their attitude (believe it or not...I do) was that the cost of having to pay out on the policy would be dwarfed by the positive PR and additional sign ups they'd likely get afterwards.

Having said that, I agree with Malvolio's stance, that they will do some due diligence on you before accepting you onto the policy. If they're confident you wouldn't stand a chance in an IR35 enquiry, they'd be highly unlikely to offer the insurance (or insist on significant changes in your contract/working practices first)...but surely that's a good thing? At least you as punter know nice and early on you're high risk, whilst otherwise you might've been blissfully ignorant.

So that was a question, not the question.

Next question is: Have they ever declined to pay out?