IR35 investigation

[psychocandy]

I read online the other day that HMRC had won 8 (!) IR35 cases that the PGC had taken them on with: How workers across Britain are becoming 'companies' to cut their tax rate to 20%' | This is Money

Crapola. Is that true?

I always thought that HMRC had never defeated anyone properly represented by PCG, QDOS etc.

[Contreras]

Should you get insurance? Depends on your risk assessment but, accountancy bills can get very big very quickly if you are paying this bill out of your own pocket.

It's an interesting question. AIUI, defending an IR35 case might cost somewhere between £2k - £25k. Where you stand in that range will depend on how quickly your defence team can bat Hector into touch. An 'average' case might be £15k max to defend. There are plenty of contractors reading this who can take that on the chin and bear it. Secondly, by being IR35 aware and keeping your ducks in order the risk is reduced considerably and any enquiry becomes easier to forestall. So now you are looking at the lower end of that range.

With most types of insurance if you're prepared to suffer the loss then purely on a risk basis it makes sense to self-insure. Remember: insurance companies are in business to turn a profit.

I personally do have tax investigation insurance (not only IR35) yet I would rate my contracts as low risk. There is some peace of mind being with the hurd perhaps.

This post may wind up those with a vested interest in the industry. It's not meant to, but just to be absolutely clear, I am absolutely not advocating DIY self-representation. Qualified representation is needed from the outset of any contact with Hector or you could be setting up for a fall.

[Batcher]

I was investigated and won after almost 4 years of stress. My advice would be to join IPSE+.

I'm sure most, if not all, of the HMRC wins are down to people not being represented properly and giving in due to the increasing cost of defending themselves. No matter what evidence you supply, HMRC will find you guilty and demand payment. I was quoted £7k to take my case to the commissioners.

[TestMangler]

Hi. Has anyone reading this ever actually been investigated for IR35 or do you know anyone who has?

I am of course extremely diligent & careful to ensure I remain within the rules but on speaking to accountants and other contractors the reality is that unclear legislation has led to insurance companies scaremongering contractors into taking insurance to protect against something that is unlikely to be looked at and even less likely to lead to any action. I must again stress that I have done everything in my power and knowledge to stay on the right side of this subject but I just wonder how real ghe threat is for us? Thank you

[TestMangler]

Crapola. Is that true?

I always thought that HMRC had never defeated anyone properly represented by PCG, QDOS etc.

See where you went wrong there ??

[v8gaz]

Crapola. Is that true?

I always thought that HMRC had never defeated anyone properly represented by PCG, QDOS etc.

PCG/IPSE have lost 8. We've won 1400. And of the 8, some were unwinnable, and others had been blown by the members attempting to represent themselves before realising they were out of their depth before calling the professionals in. Let's put it in perspective.

[I just need to test it]

I see mention on here of investigation insurance. Is that over and above what IPSE offers? Or is that something people take out in lieu of having IPSE membership?

[TheFaQQer]

I see mention on here of investigation insurance. Is that over and above what IPSE offers? Or is that something people take out in lieu of having IPSE membership?

Some see it as a replacement to IPSE membership - and if all you are after from IPSE is the IR35 investigation cover, then I would suggest shopping around.

Some (myself included) have it as additional cover - if I was being investigated by HMRC, I would be ringing Qdos not IPSE.

[BolshieBastard]

It's an interesting question. AIUI, defending an IR35 case might cost somewhere between £2k - £25k. Where you stand in that range will depend on how quickly your defence team can bat Hector into touch. An 'average' case might be £15k max to defend. There are plenty of contractors reading this who can take that on the chin and bear it. Secondly, by being IR35 aware and keeping your ducks in order the risk is reduced considerably and any enquiry becomes easier to forestall. So now you are looking at the lower end of that range.

With most types of insurance if you're prepared to suffer the loss then purely on a risk basis it makes sense to self-insure. Remember: insurance companies are in business to turn a profit.

I personally do have tax investigation insurance (not only IR35) yet I would rate my contracts as low risk. There is some peace of mind being with the hurd perhaps.

This post may wind up those with a vested interest in the industry. It's not meant to, but just to be absolutely clear, I am absolutely not advocating DIY self-representation. Qualified representation is needed from the outset of any contact with Hector or you could be setting up for a fall.

When I was contracting, I could fund my own costs to more than 25k but why would you want to do that if you can insure yourself against it for a couple of hundred quid a year?

Im usually averse to insurance but some like IR35 is just too big to ignore.

[Contreras]

When I was contracting, I could fund my own costs to more than 25k but why would you want to do that if you can insure yourself against it for a couple of hundred quid a year?

Put it another way, whatever the costs, why would an insurance company take yours and my money if they couldn't turn a profit overall?

Im usually averse to insurance but some like IR35 is just too big to ignore.

Agree with that.