IR35 insurance - worth buying at this stage in my situation?

[Syd]

It's definitely still worth purchasing IR35 insurance for a piece of mind. I just did it and QDOS confirmed the policy covers retroactive investigations for previous contracts and tax years. You can keep the policy even after down closing your Ltd and conveniently pay from company money up to one year upfront.

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[rootsnall]

It's definitely still worth purchasing IR35 insurance for a piece of mind. I just did it and QDOS confirmed the policy covers retroactive investigations for previous contracts and tax years. You can keep the policy even after down closing your Ltd and conveniently pay from company money up to one year upfront.

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Is this insurance covering the NI liability or just insurance to provide expertise in the case of any investigation ?

mrrossi - I have joined IPSE, this just covers the cost of any investigation

[GhostofTarbera]

mrrossi - I have joined IPSE, this just covers the cost of any investigation

Indeed it will if you have met the criteria

You did get your last contract reviewed for example didn’t you? Or did you just sigh it like the majority?


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[dsc]

You did get your last contract reviewed for example didn’t you?

Isn't this required to get insurance in the first place?

[jamesbrown]

Isn't this required to get insurance in the first place?

It depends what you mean by insurance. IPSE don't offer insurance. They cover you for the professional fees associated with tax investigations (not just IR35) and they insure themselves. Other companies offer tax loss insurance to the PSC (it's a company liability), some of which are based on IPSE membership (to cover professional fees). As to whether a review is required, it varies. Afterall, the unconditional probability of an HMRC win is quite low; a successful review will reduce that further. Hence the change in tack from HMRC to push more contracts away from PSCs or to de facto inside, even if they could be cast outside quite easily were the clients not fearful.

[rootsnall]

Indeed it will if you have met the criteria

You did get your last contract reviewed for example didn’t you? Or did you just sigh it like the majority?

Sighed a few times and then read the contract to check it had the key points in there. IPSE isn't insurance, the membership will provide you with 'Tax Investigation Costs' which I assume is some expert guidance in the case of an investigation. For me it's just making sure I don't do anything stupid if they come a knocking. If they tell me I'm stuffed then so be it, it's better than guessing.

[Syd]

Is this insurance covering the NI liability or just insurance to provide expertise in the case of any investigation ?

Their website says:

Full IR35 insurance, covering representation costs in dealing with HMRC plus additional tax, NIC, interest and penalties arising from an IR35 enquiry.

You can choose from £25k, £50k, £75k or £100k levels of indemnity as required in the 'Questions' section of the purchase process.

[FIERCE TANK BATTLE]

I've had IR35 insurance since day one, considering the trivial cost of a few hundred quid it's a no brainer.

Remember, you can get investigated even if you're totally legit and do all the right things and it becomes a giant pain to deal with.

I remember reading a story about a guy where HMRC demanded he attend their offices, that'd be a day's lost pay + wages, he had IR35 insurance (qdos I think) and set the dogs on them, and they caved and instead just agreed to ask him a few questions over the phone and it was done & dusted.

I imagine you can head a lot of it off at the pass by just telling them you have qdos insurance because they'll probably give up there and then, not worth the fight when you can find some poor shmuck who can't defend himself. But who knows, HMRC do seem to like fighting losing cases and then losing appeals...

[simes]

But who knows, HMRC do seem to like fighting losing cases and then losing appeals...

Indeed they've made a career of it...

[Hamlet]

It's definitely still worth purchasing IR35 insurance for a piece of mind. I just did it and QDOS confirmed the policy covers retroactive investigations for previous contracts and tax years. You can keep the policy even after down closing your Ltd and conveniently pay from company money up to one year upfront.

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Last time I checked, admittedly a while ago, the tax cover had a condition around the working practices reflecting the contract. But if your working practices really do reflect your contract then you have little to fear from an investigation, assuming your legal costs are covered. If they don't, then the insurance may not pay out.

So it is (or was) really just covering the contract reviewer's interpretation of case law, and not the (likely bigger) risk of a client saying something unhelpful about your working practices.