Reply to: IR35 Insurance

[MickeyP]

What this amounts to is this:

Contractor has to sign Lawspeed's own drafted EB standard contract which is not necessarily back-to-back with the same they've drafted between EB and client.

You then haven't a clue whether you are really inside or not.

You ring up Lawspeed who fleece you to check the terms of 'their' contract and say you are outside.

Meanwhile they know full well that someone else in the firm has drafted inside IR35 terms between the same EB and the client you are working to.

You then ring up Lawspeed and pay them for insurance as well as the original check on your EB terms that they organised in order to mitigate your risks about their own carefully crafted and confusing EB terms that gave rise to the problem in the first place.

Nice one James.

Next time I enquire about becoming a blood donor perhaps I should ring up Dracula.

Totally confused again sorry. EB?

[lawspeed]

IR35 Insurance

ATP can provide you with further details about the policy itself:
Abbey Tax Protection

It is underwritten by certain longstanding underwriters at Lloyd’s of London.

[rootsnall]

What is particularly unique about Abbey Tax Protection's policy is that you only take out Survive35 Tax-Safe insurance for the period of the actual contracts to be covered. In order to make a claim you do however need to have kept in place 'PEI' - Professional Expenses Insurance (either by continuing PCG membership which has it included or by renewing this with ATP directly). So the ongoing costs can be relatively low.

If we take an example where you either only contract for one year (2006 say) or where you only have IR35-approved contracts for that one year, you would take out Survive35 Tax-Safe insurance for that one year, then simply keep your PCG membership current for the next 6 years to enable you to make a claim throughout that time relating to the contracts in 2006.

Thanks for the reply.

What worries me about any of the insurance schemes offering to pay the tax bill is that they charge a premium that reflects the current risk of them paying out ie. low.

If the IR start winning cases or retrospectively change the rules to make sure they win cases then the insurers are either going to have to increase their premiums to much higher levels or I suspect invoke clauses to avoid paying out. I assume there is lots of fine print in the Survive35 Tax-Safe insurance policy and I'm guessing there will be something about the IR changing the rules !? Is the Survive35 Tax-Safe insurance policy underwritten by a large organisation ?

[lawspeed]

IR35 Insurance

What is particularly unique about Abbey Tax Protection's policy is that you only take out Survive35 Tax-Safe insurance for the period of the actual contracts to be covered. In order to make a claim you do however need to have kept in place 'PEI' - Professional Expenses Insurance (either by continuing PCG membership which has it included or by renewing this with ATP directly). So the ongoing costs can be relatively low.

If we take an example where you either only contract for one year (2006 say) or where you only have IR35-approved contracts for that one year, you would take out Survive35 Tax-Safe insurance for that one year, then simply keep your PCG membership current for the next 6 years to enable you to make a claim throughout that time relating to the contracts in 2006.

[rootsnall]

Questions about the insurance itself can be put to the insurers Abbey Tax Protection (the same insurer that provides representation cover via PCG membership). We provide the approval to determine eligibility to apply for cover - this involves an assessment of the contractual evidence and working practices.

With regard to our contracts, Lawspeed was the first service provider to provide recruiters with contracts designed for contractors to operate outside IR35. These templates have been provided since July 1999, well in advance of the implementation of IR35, and have been approved by the PCG as well as having been successfully defended in all adverse Revenue decisions to our knowledge.

James,

Do the insurance premiums have to be kept up indefinitely !?

If for example I paid for insurance for 2006 but had now stopped paying my premiums. And then the IR decide to investigate me at some stage in the future regarding 2006. Am I covered for 2006 for all costs and tax bills ?

Regards, Roots

[lawspeed]

IR35 Insurance

Questions about the insurance itself can be put to the insurers Abbey Tax Protection (the same insurer that provides representation cover via PCG membership). We provide the approval to determine eligibility to apply for cover - this involves an assessment of the contractual evidence and working practices.

With regard to our contracts, Lawspeed was the first service provider to provide recruiters with contracts designed for contractors to operate outside IR35. These templates have been provided since July 1999, well in advance of the implementation of IR35, and have been approved by the PCG as well as having been successfully defended in all adverse Revenue decisions to our knowledge.

[MickeyP]

More questions will be asked later. It's no different to taking out travel insurance for lost baggage. They need to only know where you are going and for how long to give you cover - however make a claim and they will want to know:

where you lost the item
how you lost the item
who you reported it to
a copy of the police report
the value of the item
original proof of ownership with a supporting receipt or some other proof
the replacement value

need I say more....

Maybe a comment from Lawspeed would be nice at this point........

[dmini]

Was that with qdos also Dmini?

yes
with regards to other comments,yes, there is a risk they won't pay - but I had a questionnaire to fill in about my working practices, ltd co payment practices etc, I ensured I was honest about what I answered, and was covered.

[MickeyP]

You're right they would do this.

That's why you need to ensure that you've really outside Ir35 prior to taking out the insurance on each and every contract. That takes a lot more effort that merely signing an iR35 friendly contract and getting it checked over by Qdos or B&C etc.

Now I'm confused. If they've looked at the contract prior to agreeing to insure then they're surely committed to honour that should an investigation take place?

[KennyG]

Apologies for the cynicism but my concern with this type of Insurance is whether or not the Insurance Company would pay out - surely in practice any Insurance Company will try to find ways of avoiding payout on any Insurance Claim - and I can't see how this could be any different?

[lawspeed]

We have arrangements with the PCG's insurer (Abbey Tax Protection) to provide Survive35 Tax-Safe insurance. This underwrites the actual IR35 tax, NIC's, interest and penalties on engagements that Lawspeed has reviewed and approved. This can be done at any time, not merely before commencement. In fact, for absolute peace of mind, some clients request reviews of all their arrangements going back to when they first started contracting (if after April 2000) to obtain full insurance cover.

[MickeyP]

I had a contract checked AFTER it started - and covered by insurance- when I became aware it could be outside (couple of months after the start

Thanks for the replies.

Was that with qdos also Dmini?

[dmini]

I had a contract checked AFTER it started - and covered by insurance- when I became aware it could be outside (couple of months after the start

[Sockpuppet]

Yes. Do a search and all shall be revealed.

Although only works if you are not already on the contract and you must get the contract cheked out with them prior to starting each one.

[Lockhouse]

Qdos Tlc35