Reply to: Qdos tlc35

[jmo21]

Makes sense now. Can you PM your email address. I've a proposal for you.

Oooftt, there it is people, business getting done!!!

[xantamisch]

i'm with others here

- I think I'm okay
- but God knows whether HMRC would agree
- if i did get investigated, I'd be able to pick up the phone and get someone who knows what they are talking about to represent me (and ideally scare HMRC off pretty quickly)
- so for me it's as much about stress avoidance as actual insurance against penalties etc

in theory anyway - haven't tested it yet......

[Alan @ BroomeAffinity]

No, the questions are just a very basic check that the contractor is operating in the right ballpark and they themselves have a reasonable knowledge of what is required to be IR35 compliant.

For example, the question: to the best of your knowledge would you be able to exercise your right of substitution? A contractor may have a decent substitution clause in their contract and - as far as they know - that is reflected in reality, but who knows what the end client will come out with when probed by HMRC. That's the real risk with IR35.

It also enables us to refer and check any difficult situations, i.e. the Friday to Monday scenario (surprising how many people still do this).

Makes sense now. Can you PM your email address. I've a proposal for you.

[Maslins]

It also enables us to refer and check any difficult situations, i.e. the Friday to Monday scenario (surprising how many people still do this).

Yup, twice this week to date I've had potential clients thinking about setting up a Ltd Co as their employer suggested it would suit everyone concerned.

Whether the employer cynically knows it'll only suit themselves (no e'ers NIC/redundancy/holiday pay etc) and be of negligible benefit to the "employee"/"contractor" (as IR35 would eat most of the possible tax benefits) or is unaware of the risk to the "contractor" I don't know.

[Qdos Contractor]

Sorry, I wasn't clear in what I meant to say. But, is it not the case that those 6 questions which you need to answer will put you firmly OUTSIDE IR35? And you will only get cover if that's the case? In which case why bother with the insurance for the tax and penalties? Surely the Total Defence cover would be enough?

No, the questions are just a very basic check that the contractor is operating in the right ballpark and they themselves have a reasonable knowledge of what is required to be IR35 compliant.

For example, the question: to the best of your knowledge would you be able to exercise your right of substitution? A contractor may have a decent substitution clause in their contract and - as far as they know - that is reflected in reality, but who knows what the end client will come out with when probed by HMRC. That's the real risk with IR35.

It also enables us to refer and check any difficult situations, i.e. the Friday to Monday scenario (surprising how many people still do this).

[Alan @ BroomeAffinity]

Because while *I* am confident that I am outside of IR35, I don't have an unlimited budget and HMRC does - and HMRC may have a wildly different idea as to my IR35 status than me, so I want to be sure that I have adequate protection.

Yep. I see that now. And for the £300 uplift from the enquiry only cover I guess that makes sense.

[RasputinDude]

Sorry, I wasn't clear in what I meant to say. But, is it not the case that those 6 questions which you need to answer will put you firmly OUTSIDE IR35? And you will only get cover if that's the case? In which case why bother with the insurance for the tax and penalties? Surely the Total Defence cover would be enough?

Because while *I* am confident that I am outside of IR35, I don't have an unlimited budget and HMRC does - and HMRC may have a wildly different idea as to my IR35 status than me, so I want to be sure that I have adequate protection.

[Alan @ BroomeAffinity]

To the best of my knowledge, I'm outside IR35. If there was an investigation, I'm pretty confident that I'd win.

But, for that nagging doubt that says I might still lose and get hit with penalties, it's worth it for the peace of mind. Plus, if they are just on the hook for the investigation costs, there's nothing to prevent them from saying "oh yes, you'll lose so pay up" and walking away. Not that I think Qdos would necessarily do that, but if they have to pay the penalties you know they are going to fight that bit harder to keep you from losing

That seems fair enough. Thanks.

[TheFaQQer]

Sorry, I wasn't clear in what I meant to say. But, is it not the case that those 6 questions which you need to answer will put you firmly OUTSIDE IR35? And you will only get cover if that's the case? In which case why bother with the insurance for the tax and penalties? Surely the Total Defence cover would be enough?

To the best of my knowledge, I'm outside IR35. If there was an investigation, I'm pretty confident that I'd win.

But, for that nagging doubt that says I might still lose and get hit with penalties, it's worth it for the peace of mind. Plus, if they are just on the hook for the investigation costs, there's nothing to prevent them from saying "oh yes, you'll lose so pay up" and walking away. Not that I think Qdos would necessarily do that, but if they have to pay the penalties you know they are going to fight that bit harder to keep you from losing

[Alan @ BroomeAffinity]

The qualifying criteria is far from high. There are just six statements that you confirm are accurate to the best of your knowledge. Naturally very little is black and white with IR35 - particularly with issues like substitution - so it's just a very basic check that the contractor is in a reasonable position to start with.

Sorry, I wasn't clear in what I meant to say. But, is it not the case that those 6 questions which you need to answer will put you firmly OUTSIDE IR35? And you will only get cover if that's the case? In which case why bother with the insurance for the tax and penalties? Surely the Total Defence cover would be enough?

[GrumpyContractor]

FWIW: The QDOS acceptance criteria are based solely on working practises. Written contracts are not considered. Having said that, as part of the TLC35 policy, you are permitted to have your contracts reviewed for free so...

[RasputinDude]

Thanks Qdos. I shall be in touch :-)

[Qdos Contractor]

The qualifying criteria is far from high. There are just six statements that you confirm are accurate to the best of your knowledge. Naturally very little is black and white with IR35 - particularly with issues like substitution - so it's just a very basic check that the contractor is in a reasonable position to start with.

It's insurance, so I fully understand the 'wriggling out of paying' type questions, but as others have said it would be massively damaging to us if we started doing that. First and foremost we are a consultancy firm; the insurance just backs up the expertise of our consultants who are genuinely keen to take on new IR35 cases.

[jamesbrown]

My understanding is, that the qualifying criteria are so high, that the chances of those who get accepted onto cover ever having to claim are vanishingly small.

I think they used to require a full contract review prior to being covered, but they don't require this anymore (I could be wrong), presumably due to the large number of people covered versus small number of cases pursued.

[jamesbrown]

Agree with Maslins, it would kill their business to avoid paying out (although I also expect they'd also want to minimize any legal costs in pursuing a weak or borderline case and probably wouldn't pursue the legal proceedings as far as IPSE, for example).