Reply to: Tax avoidance insurance

[centurian]

replying to this to bump it up .... the current crop of '85% +' umbrella schemes do have insurance - but if you look closely they only cover the fees not the amounts you get stung for. They only pay out once the scheme has been defeated in court, by which time no one will care.

I wonder how they will treat the new Accelerated Payment Notices soon to be pushed out. Since the scheme hasn't been defeated, insurers have a very easy get out clause. And given the onus is then on the taxpayer to take HMRC to court to prove the scheme is valid, they probably never will pay out.

[jbryce]

scheme insurance? ha ha ha ha ha....

IR35 insurance is probably okay, because they only lose one case at a time - and the amount lost on one case is relatively small in the grand scheme of things - not worth the reputational damage. Whether they would then continue to offer renewals if they lost a succession of cases is another matter

Insurance of the mass marketed schemes always was lunacy. These insurers are in for 100s of millions with the loss of one case. They're not going to pay out without a massive fight. More quote's here

Advisers accused of



So if it had been a genuine investment vehicle, what was the insurance for, I wonder?

replying to this to bump it up .... the current crop of '85% +' umbrella schemes do have insurance - but if you look closely they only cover the fees not the amounts you get stung for. They only pay out once the scheme has been defeated in court, by which time no one will care.

[centurian]

IR35 insurance is probably okay, because they only lose one case at a time - and the amount lost on one case is relatively small in the grand scheme of things - not worth the reputational damage. Whether they would then continue to offer renewals if they lost a succession of cases is another matter

Insurance of the mass marketed schemes always was lunacy. These insurers are in for 100s of millions with the loss of one case. They're not going to pay out without a massive fight. More quote's here

Advisers accused of

Investors' in Icebreaker are now turning to insurance company Enterprise to pay out on policies it provided in respect of "losses or shortfalls" incurred by those who invested in the scheme.

However Enterprise is refusing to honour the insurance policies, on the grounds that it was deceived by Hamilton and her colleagues into believing that Icebreaker was a genuine investment vehicle, rather than an elaborate scheme designed solely to avoid tax.

...

‘Enterprise approached the risk that it was to cover based on...the proposition (albeit mistaken) that the full capital contribution would be invested by participants, and that the proceeds thereof would genuinely be used with a view to profitable trade.

So if it had been a genuine investment vehicle, what was the insurance for, I wonder?

[Qdos Contractor]

So I take it that means no one with the cover has ever failed an IR35 investigation...?

Have any people with the cover been investigated and won?

That's correct (sorry, I'm on a train with poor wifi).

And yes, the majority of the 1,300+ cases we've won have involved clients who have had insurance cover of some form; many of them the full TLC policy.

[malvolio]

So I take it that means no one with the cover has ever failed an IR35 investigation...?

Have any people with the cover been investigated and won?

AFAIK no PCG member has lost a case for many years. The very few (less than 10?) that were early losses didn't start out with professional support.

[blacjac]

So I take it that means no one with the cover has ever failed an IR35 investigation...?

Have any people with the cover been investigated and won?

[Qdos Contractor]

So that was a question, bot the question.

Next question is: Have they ever declined to pay out?

No.

[speling bee]

Last time I spoke to QDOS about this (admittedly a little over a year ago) they said they'd never had to pay out on their TLC35 insurance...and perhaps more interestingly that they really wanted to.

Their attitude (believe it or not...I do) was that the cost of having to pay out on the policy would be dwarfed by the positive PR and additional sign ups they'd likely get afterwards.

Having said that, I agree with Malvolio's stance, that they will do some due diligence on you before accepting you onto the policy. If they're confident you wouldn't stand a chance in an IR35 enquiry, they'd be highly unlikely to offer the insurance (or insist on significant changes in your contract/working practices first)...but surely that's a good thing? At least you as punter know nice and early on you're high risk, whilst otherwise you might've been blissfully ignorant.

So that was a question, not the question.

Next question is: Have they ever declined to pay out?

[Maslins]

The question is: has it ever paid out?

Last time I spoke to QDOS about this (admittedly a little over a year ago) they said they'd never had to pay out on their TLC35 insurance...and perhaps more interestingly that they really wanted to.

Their attitude (believe it or not...I do) was that the cost of having to pay out on the policy would be dwarfed by the positive PR and additional sign ups they'd likely get afterwards.

Having said that, I agree with Malvolio's stance, that they will do some due diligence on you before accepting you onto the policy. If they're confident you wouldn't stand a chance in an IR35 enquiry, they'd be highly unlikely to offer the insurance (or insist on significant changes in your contract/working practices first)...but surely that's a good thing? At least you as punter know nice and early on you're high risk, whilst otherwise you might've been blissfully ignorant.

[cojak]

Because any wise adviser would caveat their advice.

...and ultimately the final decision always resides with the purchaser. Advice is exactly that - advice (just ask any accountant/lawyer).

Although in the past we've had promoters on here laugh at the 'armchair warriors' on the forum, telling punters to ignore us and rely on the advice of 'tax specialists'; those specialists aren't the ones getting bitten on the bum today.

[speling bee]

No - it's because the insurer will make pretty damn sure you aren't caught before offering you the cover. If you want to insure against something that the insurer is convinced won't happen then go ahead.

There's another potential twist, come to that. If a reviewer says you are outside and you arrange your affairs accordingly, then you lose a case and have to pay out the back taxes, why wouldn't you then sue the advisor for the losses since it was their bad advice that created them?

Because any wise adviser would caveat their advice.

[malvolio]

Because they will come up with some reason not to pay out I take it?

No - it's because the insurer will make pretty damn sure you aren't caught before offering you the cover. If you want to insure against something that the insurer is convinced won't happen then go ahead.

There's another potential twist, come to that. If a reviewer says you are outside and you arrange your affairs accordingly, then you lose a case and have to pay out the back taxes, why wouldn't you then sue the advisor for the losses since it was their bad advice that created them?

[speling bee]

Because they will come up with some reason not to pay out I take it?

The question is: has it ever paid out?

[kal]

So join PCG. Cover is unconditional.

Unless you're talking about insurance to cover the extra tax arising from losing a case - which I've said for years is probably a waste of money.

Because they will come up with some reason not to pay out I take it?

[malvolio]

That's my view also. When I looked at IR35 insurance you basically had to sin that you were outside of IR35, but surely if you are found by HMRC to be inside, then the insurance company will take the same view that your application was void?

So join PCG. Cover is unconditional.

Unless you're talking about insurance to cover the extra tax arising from losing a case - which I've said for years is probably a waste of money.