Reply to: IR35 Insurance

[Lewis]

I don't mean investigation insurance but tax loss insurance. They only sell it to you if it's a no brainer for them.

I've said this all before on past threads but remember a (PCG) case was fairly recently lost because the end-client changed their story at the last minute. It's never a no-brainer, there is always a chance (however small) you might lose, put simply if you want peace of mind and to protect many years worth of dividends just pay the few quid more ....

You have to put the cost into perspective, I lose more money by taking a day off sick! I lose more money on BUPA which I have never used. I haven't claimed on my car insurance for over 10 years. But I feel relaxed about driving, know that I and my family won't have to wait for an operation and also that I won't have HMRC take tens of thousands of pounds from me for IR35. Peace of mind ... that's what it is all about.

You don't need to agree with me but for the benefit of other people reading these threads I don't think it is fair to keep saying that IR35 cases can't be lost anymore if you are professionally represented, which is essentially the underlying message. Ask the person that lost if they think it is worthless or not. I bet they thought "It won't happen to me".

[pisces]

Well, I wonder if you would say that after a 3 year IR35 investigation which you had to deal with all on your own You might relish the chance to take on all the work a case involves (even when innocent) but I and many others don't. This insurance provides great peace of mind!!

I don't mean investigation insurance but tax loss insurance. They only sell it to you if it's a no brainer for them.

[malvolio]

I think we've agreed to disagree dozens of times on whether TLC35 is redundant or not, you'll never get me to give it up

Wouldn't dream of trying. Bet you never use it though...

[Lewis]

Don't disagree, but I think he was talking about TLC35, which I've always thought was a bit redundant.

I think we've agreed to disagree dozens of times on whether TLC35 is redundant or not, you'll never get me to give it up

[malvolio]

Well, I wonder if you would say that after a 3 year IR35 investigation which you had to deal with all on your own You might relish the chance to take on all the work a case involves (even when innocent) but I and many others don't. This insurance provides great peace of mind!!

Don't disagree, but I think he was talking about TLC35, which I've always thought was a bit redundant.

[Qdos Contractor]

Fact is, anyone that satisfys your criteria doesn't need the insurance in the first place.

This argument has been done to death before, so I'll keep it brief. Our 'criteria' is far from detailed - we simply ask a series of 'yes or no' type questions relating to the working practices and the running of a contractor's business.

IR35 is all down to interpretation and we don't know how HMRC will view specific areas. We have a good track record in IR35 enquiries, but that hides the fact that many cases are incredibly hard to defend. It's impossible to guarantee the successful outcome of any enquiry, especially with the more recent concern relating to upper level contracts.

[Lewis]

Fact is, anyone that satisfys your criteria doesn't need the insurance in the first place.

Well, I wonder if you would say that after a 3 year IR35 investigation which you had to deal with all on your own You might relish the chance to take on all the work a case involves (even when innocent) but I and many others don't. This insurance provides great peace of mind!!

[exbrm]

No-Brainer .......

We don't keep statistics to that degree. However, we have successfully defended over 1000 IR35 enquiries and a significant number of those involved directors who took low salary payments.

For obvious reasons the Revenue prefer enquiring into contractors who would be subject to the highest tax loss. This means that when, reviewing P35s, they will opt for those with nominal payments rather than a 'reasonable' level. It's a no-brainer for them.

Thanks Qdos for the free advice. Pitty the No-Brainer bit does not sink in with some.

[pisces]

That's not why we set the minimum level. We are simply looking to minimise the risk of enquiry for contractors. There is no hidden agenda.

A salary between £9.5k and £15k will increase the standard excess from £250 to £500. £15k is optimum and is considered an acceptable level of salary for industries across the board.

As Darren states, it does not have any direct implications on IR35, but with a policy worth £100k plus we need to satisfy underwriters that we are not taking undue risk.

Fact is, anyone that satisfys your criteria doesn't need the insurance in the first place.

[Lewis]

PCG's latest win just came through. It's been running for six years... The guy is taking Christmas off to get drunk . We'll get the full story next year, but can you imagine having that kind of threat over your head for that long?

That's why PCG are kicking off a campaign to get HMRC subject to a duty of care - what they do and how they do it is currently indefensible.

[malvolio]

They take so long because a) the Revenue go into a huge amount of detail and b) they are incredibly slow to respond. IR35 enquiries are rarely short. I am dealing with one case that started as a PAYE review over two years ago and the Revenue have only just kicked off a specific IR35 enquiry.

You get nothing back, which is why representation insurance is so worthwhile.

PCG's latest win just came through. It's been running for six years... The guy is taking Christmas off to get drunk . We'll get the full story next year, but can you imagine having that kind of threat over your head for that long?

That's why PCG are kicking off a campaign to get HMRC subject to a duty of care - what they do and how they do it is currently indefensible.

[Qdos Contractor]

I really can't imagine why it would take that long if your accounts and working practices are clearly outside though.

If you're eventually proved innocent, do you get any costs back?

They take so long because a) the Revenue go into a huge amount of detail and b) they are incredibly slow to respond. IR35 enquiries are rarely short. I am dealing with one case that started as a PAYE review over two years ago and the Revenue have only just kicked off a specific IR35 enquiry.

You get nothing back, which is why representation insurance is so worthwhile.

[Hiram King Of Tyre]

Because, insured or not, being subject to an enquiry is never nice. With IR35, in can take three years to prove your innocence and I can't even begin to imagine what the stress is like for clients, even when we are dealing with HMRC.

I really can't imagine why it would take that long if your accounts and working practices are clearly outside though.

If you're eventually proved innocent, do you get any costs back?

[Qdos Contractor]

Meaning that it's possible to take out TLC35 on less than £9.5k? Perhaps just more expensive?

No, that's incorrect. For TLC the salary has to be above £9.5k.

Freelancer Tax Protection, which is representation cover, does not require any set salary level.

[Qdos Contractor]

If you are clearly and catagorically outside IR35, then why fear an investigation?

That is an innocent question by the way, and yes I did recently have my contract and working practices reviewd by Qdos.

Because, insured or not, being subject to an enquiry is never nice. With IR35, in can take three years to prove your innocence and I can't even begin to imagine what the stress is like for clients, even when we are dealing with HMRC.