Client suddenly deems you inside before April

[jamesbrown]

If the client deems you inside would that not invalidate your TLC35 insurance as the client is telling you that you don't have a right to substitution, at that point you can't honestly say you believe you have that right and your insurance becomes invalid.

They will only pursue and cover if there's a realistic chance of success:

https://www.contractoruk.com/forums/...ml#post1859910

[Qdos Contractor]

If the client deems you inside would that not invalidate your TLC35 insurance as the client is telling you that you don't have a right to substitution, at that point you can't honestly say you believe you have that right and your insurance becomes invalid.

It's going to depend on the circumstances of the 'inside' determination. Every case is likely to be different and we'd need to assess each one individually. It's difficult to have a universal stance and we'd certainly hope that we could provide the majority of contractors with retrospective protection of some sort.

On a more positive note, we're speaking to a hell of a lot of private sector companies at the moment and getting very few signs of kneejerking or excessive risk aversion. I'd very much like a conversation with OP's client...

Seb

[Royston1664]

Thanks to everyone who replied, really appreciate the time taken and level of detail provided, hopefully this thread will provide valuable information for those in a similar situation of which I am sure there will be many, I will be taking on the suggestions offered.

Thanks once again this has been a great help and clarified a great deal of points for me.

Royston

[ContrataxLtd]

On a more positive note, we're speaking to a hell of a lot of private sector companies at the moment and getting very few signs of kneejerking or excessive risk aversion. I'd very much like a conversation with OP's client...

Seb

OP, I'd certainly be getting in touch with Seb and putting him in touch with your client somehow...

Martin
Contratax Ltd

[GhostofTarbera]

OP, I'd certainly be getting in touch with Seb and putting him in touch with your client somehow...

Martin
Contratax Ltd

This op get QDos on the case, the leader in this field


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[jk3838]

It's going to depend on the circumstances of the 'inside' determination. Every case is likely to be different and we'd need to assess each one individually. It's difficult to have a universal stance and we'd certainly hope that we could provide the majority of contractors with retrospective protection of some sort.

Seb

OK, so there are some circumstances that an 'inside' determination from the client could make your TLC35 invalid; can you tell us what circumstances ?

So to ask the OP's question again, should he leave before he gets assessed (his client is talking about doing assessments way before April) so as not to risk himself suddenly not being insured and having no retrospective protection ?

[jamesbrown]

OK, so there are some circumstances that an 'inside' determination from the client could make your TLC35 invalid; can you tell us what circumstances ?

So to ask the OP's question again, should he leave before he gets assessed (his client is talking about doing assessments way before April) so as not to risk himself suddenly not being insured and having no retrospective protection ?

I doubt you’ll get the definitive answer that you and the OP are hoping for. There must be a realistic prospect of success in their judgement. However, up until now, they probably would’ve relished the opportunity to pay out, given the advertising value to resell more insurance. Still, if the average probability of success changes for some reason, their judgement might change too.

[Qdos Contractor]

As jamesbrown says, it's difficult to give a definitive answer as there are so many variables.

Most IR35 cases are won or lost on end client evidence, so if the client suddenly declares you are caught by IR35 then it immediately makes any defence far more difficult. Factors like whether substitution is allowed are ultimately policy-level decisions for the client to make and if they take a particular stance it would be very hard to argue against it.

It depends entirely on what they do though, and how they have arrived at their determination.

It's not going to be black and white and I imagine we'll be having a lot of conversations with both contractors and clients, perhaps in a mediatory capacity, in the run up to next April. As I said, I'd certainly hope that we could find a solution for the majority of contractors - but that solution could take many different forms.

[jk3838]

I doubt you’ll get the definitive answer that you and the OP are hoping for. There must be a realistic prospect of success in their judgement. However, up until now, they probably would’ve relished the opportunity to pay out, given the advertising value to resell more insurance. Still, if the average probability of success changes for some reason, their judgement might change too.

I've got the TLC35 insurance, and had the current contract reviewed by QDOS as 'outside', but if the client decides at any time to do an assessment, and in order to cover themselves, decides to make it 'inside' regardless, then the insurance could be instantly invalid, even for any retrospective contract prior to the client assessment, and even if you give notice straight away and leave ?

If so, what's the point in having TLC35 ?

The peace of mind I had, suddenly just disappeared

[jamesbrown]

I've got the TLC35 insurance, and had the current contract reviewed by QDOS as 'outside', but if the client decides at any time to do an assessment, and in order to cover themselves, decides to make it 'inside' regardless, then the insurance could be instantly invalid, even for any retrospective contract prior to the client assessment, and even if you give notice straight away and leave ?

If so, what's the point in having TLC35 ?

The peace of mind I had, suddenly just disappeared

I think you’re overstating this. However, if you thought that your insurance was a guarantee, you were wrong. Insurance companies need to protect themselves against tail risk. Imagine the potential liability if a very large client were to decide, for whatever reason, that a particular type of role had always been inside and that they were prepared to argue that case aggressively. There would be no realistic prospect of success. Imagine if 10% of their contractors in this role had an insurance product. The liabilities could be enormous if the insurer decided to defend those no-hope cases. That is the sort of tail risk that insurers protect themselves against with their T&Cs. They aren’t hiding anything from you, but you do need to read the T&Cs. If the client decides to nail you for whatever reason, then you’re in trouble and you always have been.