IR35 insurance when closing down a business

[heyya99]

I'm in a similar situation. I did MVL last year and have received my distribution. My IR35 insurance is up for renewal. I am considering renewing because HMRC can still go back and investigate up to 6 years. Should I not be concerned about that and insure accordingly?

[eek]

I'm in a similar situation. I did MVL last year and have received my distribution. My IR35 insurance is up for renewal. I am considering renewing because HMRC can still go back and investigate up to 6 years. Should I not be concerned about that and insure accordingly?

Who are HMRC going to get the money from?

Think it though and stop worrying.,

[philgo]

I'm in a similar situation. I did MVL last year and have received my distribution. My IR35 insurance is up for renewal. I am considering renewing because HMRC can still go back and investigate up to 6 years. Should I not be concerned about that and insure accordingly?

Which insurance did you take for the first year?

[heyya99]

Which insurance did you take for the first year?

QDOS tax liability

[michaelC]

I am also interested in their tax liability insurance. However I think because of the below statements they ask you to confirm before insuring you, it makes the insurance useless.


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

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

3) You are able to exercise a Right of Substitution. The right must exist in practice – a written right of substitution in your contract is not sufficient unless it would be honored by your client


The first statement is very vague and general. How would one know what is the supervision and control the of other employees in that company, so that he can compare to theirs? It's none of our business how the company supervises and controls the other employees.

For the second statement, how would one be able to check the contract between the agency and the end client? I've never been shown it, as it's none of my business.

The third statement, well its in the contract, but again how would you prove that the client would have honored that right?


You need to be able to prove the above 3 statements, in order for them to pay you the insurance. But if you can actually do that, then you can also show the exact same proofs to HMRC anyways, so you won't have to pay the tax liability anyways. So what's the point of this insurance then?

If they were serious about providing tax liability insurance they should just provide it just based on the contract we have between our ltd co and the agency as this is the only thing we can confirm to them with 100% certainty.

[jamesbrown]

I think it’s a waste of money for other reasons, but you’re misunderstanding that second question. It isn’t asking whether you’ve seen what’s in the upper contract or to guess what might be in it. It’s asking you whether you know about any discrepancy. If you know nothing about the upper contract, then the answer is obviously no and you will be covered if a discrepancy arises (assuming there is still a “reasonable prospect of success”). Again, I think it’s a waste of money, but not for the reasons you cite.