Reply to: IR35 insurances required going forward?

[oleanderwand]

Thanks all for your thoughts, much appreciated. It seems that switching to IPSE post MVL for a year or so makes more sense from all fronts. I've always paid for Qdos TLC35 myself per accountant's advice even though it insures the Ltd (TLC35 cost is not allowable business expense, unlike PI / PL); so switching to IPSE in this case would also give me access to its rewards / perks that come with the membership at the very least - another pros to IPSE option.

[jamesbrown]

No idea about Qdos, but I know IPSE has a wind-down membership option that you pay personally. Other than VAT, not much difference anyway, because the IPSE fee is not CT deductible.

[SuperLooper]

Assuming you want to keep the policies going, are QDOS and IPSE generally OK with transferring your monthly direct debit from business to personal bank account once the company is closed? Is it just a matter of phoning them up to give them new bank details, or do they want you to change the policy terms?

[jamesbrown]

OK. I wasn't aware that was how they do it. I thought they came after the director(s) personally. I guess it gets quite complex then as the company has no money, so they still have to pursue the directors, but they are taking the necromanced company to a tax tribunal????

They might try to transfer the liability directly, but there is a high bar for that, i.e., no contract review, bang to rights inside IR35, careless or fraudulent behaviour. In the first (and second and third) instances, it is a company liability, so they would need to reinstate the company and try to have earlier payments classified as ultra vires etc. If they succeeded, the net effect might be roughly the same (indirectly, rather than directly), but it would be very hard; that is to say, it is very far from a low-hanging fruit and they would be trying to make some sort of broader point in attempting it, so you can be pretty sure they would pick something on the more egregious end of the spectrum (in which case, a direct transfer of liability might be feasible).

[Fred Bloggs]

OK. I wasn't aware that was how they do it. I thought they came after the director(s) personally. I guess it gets quite complex then as the company has no money, so they still have to pursue the directors, but they are taking the necromanced company to a tax tribunal????

It's more than that. Not only does the company have no assets, it doesn't even exist after strike off!

[Lance]

No it wouldn't.

It would be HMRC trying to resurrect the company, without the company there is nothing for HMRC to attack.

OK. I wasn't aware that was how they do it. I thought they came after the director(s) personally. I guess it gets quite complex then as the company has no money, so they still have to pursue the directors, but they are taking the necromanced company to a tax tribunal????

[eek]

well yes. But the specific recent question was around after the company has closed. In that case it would be HMRC pursuing a person. Like I say, check Ts and Cs. Make sure there are no exclusions for ex-directors being chased. And TLC35 would be in the company name anyway so that's not going to help is it?
IPSE might be different, but again, check Ts and Cs.

No it wouldn't.

It would be HMRC trying to resurrect the company, without the company there is nothing for HMRC to attack.

[Lance]

For a separate legal entity (I.e. your limited company) not connected with the property or the policy. I doubt it

well yes. But the specific recent question was around after the company has closed. In that case it would be HMRC pursuing a person. Like I say, check Ts and Cs. Make sure there are no exclusions for ex-directors being chased. And TLC35 would be in the company name anyway so that's not going to help is it?
IPSE might be different, but again, check Ts and Cs.

[eek]

some home insurances provide perosnal legal cover. That may be sufficient. Check Ts & Cs.

For a separate legal entity (I.e. your limited company) not connected with the property or the policy. I doubt it

[Lance]

some home insurances provide perosnal legal cover. That may be sufficient. Check Ts & Cs.

[jamesbrown]

It would be monumentally difficult (although not impossible) for HMRC to unravel an IR35 case when the company has been closed and/or transfer liability to you personally (absent fraud). Nevertheless, I would skill keep IPSE for a year or so afterwards - I think they have a heavily discounted/wind-down membership option. As to tax loss insurance, you'd need to check the policy, but it's probably claims made (i.e., a valid policy at the time the claim is made) and the liability and hence insured would be YourCo, not you, but check with them. I highly doubt it's worth keeping that in place, but tax loss insurance is probably a complete waste of money anyway.

[oleanderwand]

Continuing this thread if I may, looking for advice for insurance post MVL.

My Ltd currently carries Qdos TLC35 and it will be wound up after its prep steps all complete possibly next year. I've searched the forum and CUK articles regarding insurance and found that the general recommendation is to keep Qdos / Ipse for at least 2 years post MVL.

What would you do in this case, how many year would you keep the insurance post MVL, and would you keep Qdos TLC35 or switch to Ipse?

Any thought is much appreciated.

[northernladuk]

I'm considering renewing IPSE.. Did you make a decision northernladuk?

Am probably going to swallow my principles and look at IPSE again. I did like the other stuff they bolted on and I can't get my head around what use the QDOS one is on it's own.

[l35kee]

I'm considering renewing IPSE.. Did you make a decision northernladuk?

[jamesbrown]

Agree. I would refuse any such contract, but I've been doing this long enough to be able to refuse and you're right that "take-it-or-leave it" will mean "take it" for some contractors who are desperate for the work or who don't know any better. As eek alluded to earlier, the real risk is probably more with changed determinations mid-contract and withheld payments than any transfer of debt several years down the line. Brave new world.