QDOS IR35 insurance

[genius]

I've had this for years now and its up for renewal. Is it in any way worth having or am I wasting my money?

[northernladuk]

I've had this for years now and its up for renewal. Is it in any way worth having or am I wasting my money?

Depends on what your engagement model is currently or what you believe it might be at some point.

[ladymuck]

How old are the contracts it's covering? HMRC could open an investigation many years after the work has finished and everyone has moved on. If they think you were really up to go no good, they could go back much more than 7 years.

It's down to your risk appetite at the end of the day. If you were unlucky enough to be picked for a VAT or PAYE review that evolved into a wider poke about, you might be grateful for the cover.

[jamesbrown]

Arguably, it’s worthless because there needs to be a reasonable prospect of success and, if there’s a reasonable prospect of success, the statistics favour the taxpayer. Either way, if you’re in the territory of careless or deliberate/concealed behaviour (i.e., extended timeframes), there won’t be a reasonable prospect of success and the insurance won’t be worthwhile, so retaining this insurance for long periods makes little sense to me (if you took reasonable care, and if you didn’t, there won’t be a reasonable prospect of success, hence my point about the circularity of worthlessness). The providers will argue differently, of course.

Unlike tax loss insurance, legal expenses cover is *always* worthwhile, because it is a guaranteed expense the moment *any* investigation begins, and IR35 investigations typically stem from more generic records checks and potentially mishandled communication in relation to those. As an aside, this is the only reason to stick with the otherwise hopeless IPSE.

[Ketto]

Have any forum members made a successful claim under the tax loss insurance?

[jamesbrown]

Have any forum members made a successful claim under the tax loss insurance?

Probably not, at least I haven't heard about it, and you would expect to hear about it because it's a good advertisement. Remember, this will only happen in a finely balanced case that carries such insurance, has a reasonable prospect of success, and ultimately loses. There may be examples out there, but I haven't heard about them and, logically, it must be a tiny fraction of an already tiny fraction of investigations. I suppose QDOS or similar may be tempted to relax the prospects of success when the stakes are relatively low just for the advertising win! Most cases that are properly represented from the beginning do not go on to lose. Of course, you don't hear about the cases that are settled because they would be hard to win or just too much stress for the contractor to bear.

[genius]

i am absolutely certain i fall outside of ir35, so yes perhaps it is pointless. or as you say, whatever the case, it is pointless.
i will look at downgrading to the cheaper option of legal protection only

i had always assumed previously that if HMRC ruled i was wrong and tried to claim £££s back from me in unpaid tax, that QDOS would just pay me back. but i guess i was living in a dream world.

[northernladuk]

i am absolutely certain i fall outside of ir35, so yes perhaps it is pointless. or as you say, whatever the case, it is pointless.
i will look at downgrading to the cheaper option of legal protection only

i had always assumed previously that if HMRC ruled i was wrong and tried to claim £££s back from me in unpaid tax, that QDOS would just pay me back. but i guess i was living in a dream world.

But here is the problem, everyone thinks they fall outside but a) HMRC just don't think so across the board and b) most people don't know enough about IR35 to be sure. If you do you due diligence getting your contract checked, acting properly and not letting your determination slip then you will be covered by the insurance.

But I'd ask why you think you are as everything is determined by the client via SDS now so what you think doesn't matter. That is unless your client is classed as a small company. So are you doing your own determination or do you have an SDS?

It's not the ruling you need to be worried about, its the cost of the investigation. Ideally you would be right you are outside and HMRC will lose but without insurance that could still be crippling. And as I say, if you due your diligence it will be covered. We don't hear about many cases in the media but many moons ago QDOS gave us a hint at how many investigations are lodged and then quickly closed once QDOS stepped in.

[jamesbrown]

But here is the problem, everyone thinks they fall outside but a) HMRC just don't think so across the board and b) most people don't know enough about IR35 to be sure. If you do you due diligence getting your contract checked, acting properly and not letting your determination slip then you will be covered by the insurance.

But I'd ask why you think you are as everything is determined by the client via SDS now so what you think doesn't matter. That is unless your client is classed as a small company. So are you doing your own determination or do you have an SDS?

It's not the ruling you need to be worried about, its the cost of the investigation. Ideally you would be right you are outside and HMRC will lose but without insurance that could still be crippling. And as I say, if you due your diligence it will be covered. We don't hear about many cases in the media but many moons ago QDOS gave us a hint at how many investigations are lodged and then quickly closed once QDOS stepped in.

All of the above speaks to cover for professional fees, not tax loss. Basically the scenario where “you do your due diligence” and then you lose is really very unlikely. Either way, I think we’re talking about Chapter 8 here, not 10, so small or overseas clients. I don’t believe QDOS provides broader tax loss cover for an entire supply chain, which would be needed under Chapter 10. As I recall, Kingsbridge is (or was) the only provider offering that.

[Qdos Contractor]

All of the above speaks to cover for professional fees, not tax loss. Basically the scenario where “you do your due diligence” and then you lose is really very unlikely. Either way, I think we’re talking about Chapter 8 here, not 10, so small or overseas clients. I don’t believe QDOS provides broader tax loss cover for an entire supply chain, which would be needed under Chapter 10. As I recall, Kingsbridge is (or was) the only provider offering that.

We do provide this cover and have done since the 2017 reforms in the public sector. Over 2,000 agencies, consultancies and clients across both the private and public sectors benefit from the insurance, which sits behind our overarching status assessment and consultancy service. We have closed down several HMRC compliance checks under this policy.

This particular policy does not involve the contractor; the main policyholder is the organisation we are contracted by (generally an agency or engager) with cover extending to other parties in the chain who have a potential liability.

As alluded to in the thread, we still separately provide the Chapter 8 policy which can be purchased directly by contractors.