Contract Review & Insurance against IR35

[Old Greg]

I and every other Contractor should. I would be absolutely livid if I had done all my homework, got everything sorted, was deemed outside IR35 and then taken to court and had my client change tack which then led me to being thousands of pounds in debt.

Fair enough - didn't explain my point properly. I'd be pretty pqssed off too, but I could imagine if this happened with my current gig, the person turning up in 3 years time would be someone who'd never met me, never worked on the project andnever talked to anyone who'd worked on the project - and I might be stuffed.

[pisces]

I think fault and liability are different things, here (who cares who's at fault if you end up having to pay the lot.)

I and every other Contractor should. I would be absolutely livid if I had done all my homework, got everything sorted, was deemed outside IR35 and then taken to court and had my client change tack which then led me to being thousands of pounds in debt.

[Lewis]

Anyone know who the client is? I want to be sure I stay well clear!

[Old Greg]

Surely then the client is at fault here, if this is what lost the case?

I think fault and liability are different things, here (who cares who's at fault if you end up having to pay the lot.)

[pisces]

Depends how much you fancy giving 20% of your gross back as tax. IR35 investigations can roll back 6 years, so it might be a good idea to treat it with respect from Day 1.

Incidentally, the 1400-and-odd to 3 ratio just changed: it's now 1487:4 since Accountax just lost one at the Specials. No details as yet, but basically the client told the Special Commisioners something different to what he told the contractor four years earlier...

Surely then the client is at fault here, if this is what lost the case?

[Lewis]

Nobody needs to insure for tax losses incurred, since the only way you'll get that insurance is if the insurer is damn well certain they won't have to pay out.

What about the poor sod that just lost. How much will he/she now have to pay HMRC? A lot more that the price of tax loss insurance, which they could have had, that's for sure!

[malvolio]

I've mentioned this before, but the company behind that particular quote, won't quote for you at all if you're involved with processing money - so all the retail banking, investment banking and retail sector contractors are not going to get that price.

Agreed, but that's an actuarial issue, isn't it. For which blame Enron and Sarbanes-Oxley, as much as anything. It's an insurance, there's a risk assessment and a higher premium. If you are in a position where you need higher levels of PI to protect your client, and are doing so at the client's request, then you should add the cost of the PI to your charges, since it is an extra business expense.

The PCG deal is aimed at the average contractor across all industries - of the 100k of them out there, not that many are working directly with back-office cash management.

[Cowboy Bob]

I've yet to see anyone beat the PCG's discounted price of around £240 for a bog standard contractor with around £100k turnover and no history (it goes down over time).

I've mentioned this before, but the company behind that particular quote, won't quote for you at all if you're involved with processing money - so all the retail banking, investment banking and retail sector contractors are not going to get that price.

[Devlin]

Go read the website, it's all explained there. As soon as you join you are covered for any aspect investigation, with the sole exception that you are not covered for any that have already started. That's it, it can't get any simpler.

Nobody needs to insure for tax losses incurred, since the only way you'll get that insurance is if the insurer is damn well certain they won't have to pay out.

And PCGPlus is not an insurance policy, it's a membership of an important and necessary lobbying organsiation that's fighting all sorts of battles on your behalf, who happen to insure their members for free for representational costs. And then chuck in Jury Service cover, agency defaulting losses cover and half a dozen serious discount offers. So why wait 6 months, there really is no point.

SOLD!

[malvolio]

So for example if I took out PCG+ insurance in 6 months time they wouldn't cover me for legal expenses looking back before the start of their insurance?? I was under the impression that they would cover your legal costs regardless?

Perhaps you are just talking about insurance which actually covers any tax liability found against you?

Go read the website, it's all explained there. As soon as you join you are covered for any aspect investigation, with the sole exception that you are not covered for any that have already started. That's it, it can't get any simpler.

Nobody needs to insure for tax losses incurred, since the only way you'll get that insurance is if the insurer is damn well certain they won't have to pay out.

And PCGPlus is not an insurance policy, it's a membership of an important and necessary lobbying organsiation that's fighting all sorts of battles on your behalf, who happen to insure their members for free for representational costs. And then chuck in Jury Service cover, agency defaulting losses cover and half a dozen serious discount offers. So why wait 6 months, there really is no point.

[Devlin]

Depends how much you fancy giving 20% of your gross back as tax. IR35 investigations can roll back 6 years, so it might be a good idea to treat it with respect from Day 1.

Incidentally, the 1400-and-odd to 3 ratio just changed: it's now 1487:4 since Accountax just lost one at the Specials. No details as yet, but basically the client told the Special Commisioners something different to what he told the contractor four years earlier...

So for example if I took out PCG+ insurance in 6 months time they wouldn't cover me for legal expenses looking back before the start of their insurance?? I was under the impression that they would cover your legal costs regardless?

Perhaps you are just talking about insurance which actually covers any tax liability found against you?

[malvolio]

Is IR35 insurance something that you should worry about getting during the first company year or is it fairly safe to wait until just before the first company end of year reports are filed?

Depends how much you fancy giving 20% of your gross back as tax. IR35 investigations can roll back 6 years, so it might be a good idea to treat it with respect from Day 1.

Incidentally, the 1400-and-odd to 3 ratio just changed: it's now 1487:4 since Accountax just lost one at the Specials. No details as yet, but basically the client told the Special Commisioners something different to what he told the contractor four years earlier...

[Devlin]

Is IR35 insurance something that you should worry about getting during the first company year or is it fairly safe to wait until just before the first company end of year reports are filed?

[malvolio]

Any recommendations on where to go for insurance products to protect against tax investigations or prosecution? I'm aware of QDos and Bauer & Cottrell. Are there others? Also, Indemnity and Libaility cover?

Not been doing this long have you?

I've yet to see anyone beat the PCG cover - PCGPlus at £210 covers everything you're going to need and for that you get around £1500 of extras.

People continue to argue about PI/PLI/ELI insurances and cost. I've yet to see anyone beat the PCG's discounted price of around £240 for a bog standard contractor with around £100k turnover and no history (it goes down over time). Of course, you have to join the PCG, but PCGPlus is such a no brainer these days there's no reason not to do so...

Otherwise, prices seems to range between £280-£500: you need to do some comparative shopping and make sure you are comparing like with like.

[NewMan]

Any recommendations on where to go for insurance products to protect against tax investigations or prosecution? I'm aware of QDos and Bauer & Cottrell. Are there others? Also, Indemnity and Libaility cover?