I have a question regarrdin contracts inside and outside and IR35 insurance

**northernladuk** · 30 July 2023, 18:03

Originally posted by ayatollahofsausagerollah View Post

Hello I'm new here I found the place via a google search I was wondering if someone could help me with some advise I was offered a couple of contracts recently after becoming made redundant as a perm employee

ADVICE

Why aren't you looking for another perm role? Plenty of them about.

First contract they have made me jump through a few hoops to get to the point where they will issue a contract , my main question regards their stipulation that I have IR35 insurance , I'm inclined to walk away from this one because it has been such a convoluted process but they are steering me towards a particular company Knightbridge ?

Is this normal ? I sit and think I'm insuring their liability, they stipulated the contract is outside not me.

It's your liability not theirs. If you get caught on an outside gig and the deem you inside it's you that's got to pay tens of thousands back.
IR35 insurance is totally normally on outside gigs. Knightsbridge are OK. QDOS do it as well.

The second contract I haven't been back in touch to accept or refuse yet but is inside IR35, I read on this forum somewhere about finding an umbrella that puts my money into my pension pot , I might be being a bit thick but if I do several contracts over the coming years inside IR35 and put money into a pension how do I know where its going ? Can anyone recommend an umbrella that does this?

Most agents will give you a list of the umbrellas they will work with. It's generally the big players so will be able to use teh same one for multiple contracts but yes you may have to go with another. It's up to you to track your own pensions. You can combine them in to your own at any point. All pension providers have a standard process to transfer them in so if you find you've got unlucky and had to go with a few different umbrellas and therefore different pension providers then just go to your own and use the transfer option to get them all put in one place.

**northernladuk** · 30 July 2023, 18:06

And get yourself up to speed with how contracting works and quickly. Read the first timers guides to the right and do a lot of research. You need to read up on being outside IR35 and understand your new responsibilities as a LTD company director. If it's inside then read up on umbrellas. Whatever your IR35 status make sure you understand SDS's and what you should and shouldn't do.

Lots of other guides on the web. Make sure you read them all.

**ayatollahofsausagerollah** · 30 July 2023, 19:15

Originally posted by northernladuk View Post

ADVICE

Why aren't you looking for another perm role? Plenty of them about.

I had a Stroke after 3 months of hunting it became apparent everything goes awesome till they meet you , So work from home it is really for me, You almost hide hence The contract gigs seem to be temp from home , You almost hide hence I can stay out of the way that way

Originally posted by northernladuk View Post

It's your liability not theirs. If you get caught on an outside gig and the deem you inside it's you that's got to pay tens of thousands back.
IR35 insurance is totally normally on outside gigs. Knightsbridge are OK. QDOS do it as well.

Ah ok I understood it as the tax man chased the Employer/Agency not me so thank you for clearing that up

Originally posted by northernladuk View Post

Most agents will give you a list of the umbrellas they will work with. It's generally the big players so will be able to use teh same one for multiple contracts but yes you may have to go with another. It's up to you to track your own pensions. You can combine them in to your own at any point. All pension providers have a standard process to transfer them in so if you find you've got unlucky and had to go with a few different umbrellas and therefore different pension providers then just go to your own and use the transfer option to get them all put in one place.

Thank you again I at least know what to go looking for.

**northernladuk** · 30 July 2023, 19:31

Originally posted by ayatollahofsausagerollah View Post

I had a Stroke after 3 months of hunting it became apparent everything goes awesome till they meet you , So work from home it is really for me, You almost hide hence The contract gigs seem to be temp from home , You almost hide hence I can stay out of the way that way

Not that many 100% WFH roles around and IMO they are going to get less. I've been looking for a week and a bit and all bar 1 I've looked at have been hybrid. One, two or three days in the office.

Ah ok I understood it as the tax man chased the Employer/Agency not me so thank you for clearing that up

Well you aren't wrong. It's whoever decides the SDS but there is a long discussion about agents trying to pass it down the chain. There maybe something in your contract about passing liability down to you hence the insurance. TBH it's peanuts, no one has ever needed it so just buy it and get on with the gig.

**eek** · 30 July 2023, 20:47

Originally posted by ayatollahofsausagerollah View Post

Ah ok I understood it as the tax man chased the Employer/Agency not me so thank you for clearing that up

The issue with an outside IR35 is if HMRC comes calling it's essential for the end client that the agency recovers what they have paid you to deduct tax.

Say you earn £100,000 - if the agency can get the money back from you it's going to cost them and the end client nothing.

Fail to recover the money from you and they need to pay HMRC £100,000 (i.e. the tax due on a worker receiving £100,000)...

**KinooOrKinog** · 31 July 2023, 11:18

Originally posted by northernladuk View Post

If you get caught on an outside gig and the deem you inside it's you that's got to pay tens of thousands back.
IR35 insurance is totally normally on outside gigs. Knightsbridge are OK. QDOS do it as well.

I had a conversation with QDOS about IR35 insurance on Friday as I'm just starting a year long outside IR35 contract, after being umbrella for the last three years or so. Their advice was that the insurance is not really necessary from the start of the contract since any investigation is retrospective, and to reassess it in six months.

**Protagoras** · 31 July 2023, 12:07

Originally posted by eek View Post

The issue with an outside IR35 is if HMRC comes calling it's essential for the end client that the agency recovers what they have paid you to deduct tax.

Say you earn £100,000 - if the agency can get the money back from you it's going to cost them and the end client nothing.

Fail to recover the money from you and they need to pay HMRC £100,000 (i.e. the tax due on a worker receiving £100,000)...

So the agency can't recover the money from the contractor's LTD Co, absent the dreaded indemnity clauses [presumably].

Therefore the agency contracts with the LtdCo to purchase insurance on its behalf.

Out of interest, is the Policy Holder the Agency or the LtdCo, or maybe both?

I've not worked out what happens in the event of a claim in terms of what LtdCo or its Directors might be expected to do.

For example, in the case of a single director LtdCo where the director becomes too ill to work, how would the agency obtain support from the LtdCo to make a claim?

Indeed, a more awkward Director might even demand payment for the work involved in submitting a claim.

This must have been thought through, but I've not seen this explained.

**northernladuk** · 31 July 2023, 12:13

Don't forget, in this case it's a condition of the contract. So whatever the theory, buy it and get on with it.

**Protagoras** · 31 July 2023, 12:26

Originally posted by northernladuk View Post

Don't forget, in this case it's a condition of the contract. So whatever the theory, buy it and get on with it.

Indeed. I was just thinking about possible pitfalls where one subcontracts purchase of insurance to a third party

I have a question regarrdin contracts inside and outside and IR35 insurance