Correct Procedure for Tax Insurance

[malvolio]

Jeez, more amateurs...

Mutuality of Obligation. Have you not read the first timer guides yet?

[themistry]

Hi Denny,

from reading what you have written in regards to the 3 main gotchas, what would one have todo to "work like a business"?

Are there certain things that can be put into place?

Kind regards
TM

[THEPUMA]

Yes I am an accountant not a contractor which means that my advice is based upon the experience of several hundred contractors over a period of 8 years (since IR35 has been in force).

Denny, do you have any specific examples of insurance claims that have not been paid out in these circumstances? Or are you just guessing that this would be the case?

[themistry]

Sorry about the earlier post ecnlosed in that strange "html code" text area. I wanted to wrap the text in some kind of box. Evidently didn't work :-(

Off Topic: You want [QUOTE ] ... [/ QUOTE]

without the space. You can edit your post.

TM

[kingshuk]

Sorry about the earlier post ecnlosed in that strange "html code" text area. I wanted to wrap the text in some kind of box. Evidently didn't work :-(

[kingshuk]

I would start tossing and turning if I were you, PUMA. It's one thing counting sheep to sleep easy at night, quite another behaving like one by copying everyone else on here who just wants to do things the 'too good to be true' way

From past posts I think PUMA is an accountant and not a contractor. So is he affected by IR35 ?

PUMA my apologies if it is not so.

[kingshuk]

Mutuality of obligation ---> http://www.contractoruk.com/ir35/mut...bligation.html

[themistry]

Thanks for all the replies,

before i make a start digesting them, can some kind sir explain what "MOO" means. Google definations are coming with nothing execpt noises that a cow makes...

TM

[kingshuk]

themistry,
If you are forming your limited company now then the company will trade for just one month (possibly less) before this financial year ends and the company report is filed. The likelihood of coming up as potential IR35 dodger for one month of business is slim.

13 months from now if you are still trading, another year end report gets sent - which is when you need to pay up the protection money

So might it not be better to buy the insurance then? Its probably not a lot of money but still defer business expenses if you can.

May be you can use that money to advertise your business in google

Kingshuk

[THEPUMA]

I think Denny is unduly pessimistic.

If you have a contract that affords you the right of subsistution OR gives you control over the way the work is performed OR gives you no MOO, then it is very unlikely that HMRC will challenge this successfully.

They would have to prove that the contract was a sham.

In Ansell vs Richardson, HMRC brought in a contractor's line manager as a witness to the fact that he did not consider that there was MOO in the relationship. The judge have him short shrift, pointing out that he was not aware of the terms of the contracts in question, nor a party to either of them and, as such, his opinion was irrelevant.

In addition, the chances of a successful investigation are tiny. The chances of an investigation at all are substantially less than 1%, in my opinion.

If I had a contract that had been approved as not caught by IR35 and insurance to cover the tax, etc, I would sleep very easily at night.

[themistry]

Hi Denny,

thanks for this reply. Very thought provoking.

Ok, so I will get in touch with the EB in regards to the contract, but what is it i need to be checking. 1) The contract they have with the employer is Back to Back or 2) The one they have with me is back to back?

Could you explain what you mean by Back to Back?

Secondly, I can get on the blower to the hiring manager and discuss working arrangements, I did cover this in the interview, however what points do you feel are valid and need to be covered?

Thanks again,
TM

[Pondlife]

Quite right - the contract between the client -> agency should reflect the contract between agency -> YourCo but you may struggle to see it. That is, they're not obliged to show it to you as it's 'none of your business'.

[themistry]

Thanks for the response,

I was under the impression there was more to it. Especially in regards to making sure the contract that the Agency had with the actual employer is valid/correct/back-to-back (unsure what this means).

TM

[Pondlife]

Get your contract reviewed by the likes of;

Lawspeed
Accountax
Qdos
Bauer & Cottrell

Get the agency/client to make any changes based on the review.

Then try to ensure that any changes reflect your actual working conditions.

HTH

[themistry]

Hi all,

ok there is insurance to cover IR35 from the PCG, QDOS and LightSpeed. I have read numerous times here the dangers of simply signing an IR35 friendly contract, getting the insurance and then being stiffed down the line.

What would you suggest I can do, before beginning employment on my next contract, to ensure any insurance I take out is in the best possible case?

I think this would be of interest and benifit to many people here.

Kind regards all,
TM