Abbey WILL (possibly) cover for retrospective PS IR35 claims

[pr1]

You're not following what Mal is saying. It's a subtle point about what they're protecting themselves against, i.e. being wrong, and not you avoiding tax that is due.

Yes but that's why i said "assuming you have a decent contract they've approved"

If they reviewed it and were happy with your contract/WP etc are outside IR35 (and hence gave you the insurance), then the client saying "he's inside IR35" on 1st April 2017 doesn't change that fact

[jamesbrown]

If there's a wilful attempt to mislead Abbey through the contract terms and explanation of WP (or they change substantially during the contract), I'm sure there's an appropriate get-out, but that's very unlikely. It's also for them to determine when to cut their losses and pay a settlement; it will become apparent quite quickly if a mistake was made. It is, therefore, a relatively straightforward (re)insurance proposition that relies on the low probability of a successful claim from HMRC, especially after a thorough review by Abbey, and a good quantification of the maximum liability. It's also worth noting that they're unlikely to mind a loss, due to the positive publicity. Nothing will change for them in April. They won't be offering their products to contracts that are caught, and most PS contracts will be caught.

[jamesbrown]

Yes but that's why i said "assuming you have a decent contract they've approved"

If they reviewed it and were happy with your contract/WP etc are outside IR35 (and hence gave you the insurance), then the client saying "he's inside IR35" on 1st April 2017 doesn't change that fact

It doesn't change the historical facts, but it certainly changes the future facts . If the client is arguing that a contract is inside, the contractual terms will reflect that, and a review will obviously fail. The argument you were having above was about whether they pay for losses incurred, and that wasn't the point that was being argued.

[northernladuk]

It will be interesting to see what new inside contracts will look like. Will agents be wanting to drop RoS and other elements they put in at the request of the contractor that are just a bit of a sham? As there is no need for them to be written to show the contractor outside it's got to be another problem for people continuing in the same gig before and after?

[MrMarkyMark]

It will be interesting to see what new inside contracts will look like. Will agents be wanting to drop RoS and other elements they put in at the request of the contractor that are just a bit of a sham? As there is no need for them to be written to show the contractor outside it's got to be another problem for people continuing in the same gig before and after?

Very good point (!)

[jamesbrown]

It will be interesting to see what new inside contracts will look like. Will agents be wanting to drop RoS and other elements they put in at the request of the contractor that are just a bit of a sham? As there is no need for them to be written to show the contractor outside it's got to be another problem for people continuing in the same gig before and after?

Well, this is indeed a manifestation of the risk of staying on. Did the WP really change on 6 April, or did the contract simply change? If the latter, were the WP really outside before, or did the contract just say this? Difficult questions for those staying in the PS past 5 April.

In a sense, though, it doesn't really matter, because you're going to be a target, and that alone is reason to leave. I appreciate that it's tough to leave a good gig, but we are contractors, afterall, and much of the hand-wringing about the details does begin to resemble the polishing of a turd.

[MrMarkyMark]

Well, this is indeed a manifestation of the risk of staying on. Did the WP really change on 6 April, or did the contract simply change? If the latter, were the WP really outside before, or did the contract just say this? Difficult questions for those staying in the PS past 5 April.

In a sense, though, it doesn't really matter, because you're going to be a target, and that alone is reason to leave. I appreciate that it's tough to leave a good gig, but we are contractors, afterall, and much of the hand-wringing about the details does begin to resemble the polishing of a turd.

At least that's one thing PC does not have to worry his little head about.

He's inside now and past the 6th April

[psychocandy]

The only assumption I'm making is you're a bit of a numpty who cannot make clear decisions based on reality.

Ultimately, I'm pretty sure you will be sitting there like a Rabbit in headlights waiting for HMRC to come and run you down.

Whatever. Makes no difference to me what you think...

[psychocandy]

AFAIK Abbey will only give you insurance under Survive35 if they are happy that the contract is outside IR35, which is not unreasonable. In effect they are insuring themselves against getting it wrong and having to pay the tax for you. You are not being insured against having to pay taxes due under a valid IR35-caught contract.

So the only defence I can see if you have to take or extend a PS contract is to get it marked as being outside IR35 - and that means (a) you and your client have to understand the legislation properly and (b) you have to be taken on with a proper contract, a clear SoA and not through CLOne.

CORRECT. Maybe I should have been clearer...

[psychocandy]

This insurance thing doesn't sound right to me at all. Massive focus on PS, so many unknowns, threat of retrospective action, many contractors have only worked in the PS... And you can take some insurance out and you are OK?

Doesn't sound right to me at all. I am not quite understanding why the Abbey et al are not changing their position slightly to make sure they are protected to some extent. Just looking at the number of institutionalized contractors that don't understand all this and just plodding on in to a massive car crash I can't see how the insurers are happy to take them under their wings for a couple of hundred quid.

You'll struggle to insure your house if you live on a flood plain and it starts raining hard.....

Question to you PC... When is 'at that time?'

My gig runs until end of Feb. PAyments will be made before April. Any extension is obviously going to be covered.

In my book that means there is no harm in looking at other options, gathering info before then. Unless the client forces the issue then AFAIK Im not commited unless I work past this date.