Reply to: Contract Review & Working Practices

[SueEllen]

The two are definitely not equal, IPSE policy does not cover the size of any tax penalties or tax liabilities that arise after an investigation. It seems that the QDOS one does, though I find it hard to believe... is it really that easy, I pay the premium which is likely to be less than the IR35 "extra" tax I have to pay and assume I am out of IR35, If I get investigated and HMRC disagree I only need to pay the excess and QDOS insurance will pay the rest upto a limit? Seems to good to be true.

One reason why I suggested you do a search.

There is some informative information which you can find through Google about both policies as a few people have posted their experiences.....

[northernladuk]

Correct

Gives you an insight into the combined chance of
a) being investigated for IR35 (about 1/1000)
b) losing an investigation whilst having an expert defence (probably about 1/500, but I'm guessing)

Indeed but even with whatever insurances you have in place it doesn't mean you should stop working on staying outside. Being investigated isn't pleasant even if you are covered.

[TheFaQQer]

The two are definitely not equal, IPSE policy does not cover the size of any tax penalties or tax liabilities that arise after an investigation. It seems that the QDOS one does, though I find it hard to believe... is it really that easy, I pay the premium which is likely to be less than the IR35 "extra" tax I have to pay and assume I am out of IR35, If I get investigated and HMRC disagree I only need to pay the excess and QDOS insurance will pay the rest upto a limit? Seems to good to be true.

It will be interesting to see what commercial offerings are available in the face of the coming onslaught.

[psychocandy]

My insurance with part of the IPSE Plus membership. QDOS reviewed the contract for me.

As far as I can tell the IPSE insurance is just to pay for time for Abbey to deal with HMRC during any review. I didn't look at QDOS insurance, I guess it must be similar or does it cover the tax you have to pay if found to be within IR35 as well (I would doubt it does cover that). Anyway, I suspect that the insurance might not be much use if the Contract fails the review (as it has done) or if the working practises are found to be within IR35. E.g I have to ask for permission for a day off, which is an indication of control.

The people giving me the issue are the agents. An agent friend of mine said when they get requests for a working practise review they support this by getting the client to provide answers. The agent in my case isn't interested.. fair enough I will do as Sue says and when I start I will fill it in.

Careful with this one. No permies ask for days off. But any contractor who steams in and says "I'm off this day and I don;t have to ask permission" is likely to be an ex-contractor before too long.

Much better to "sort of" ask by way of "I'm planning to be out of the office on this day, will this cause any issues for you?"

[pr1]

The two are definitely not equal, IPSE policy does not cover the size of any tax penalties or tax liabilities that arise after an investigation. It seems that the QDOS one does, though I find it hard to believe... is it really that easy, I pay the premium which is likely to be less than the IR35 "extra" tax I have to pay and assume I am out of IR35, If I get investigated and HMRC disagree I only need to pay the excess and QDOS insurance will pay the rest upto a limit? Seems to good to be true.

Correct

Gives you an insight into the combined chance of
a) being investigated for IR35 (about 1/1000)
b) losing an investigation whilst having an expert defence (probably about 1/500, but I'm guessing)

[MPwannadecentincome]

I suggest you do a search (through google) to see reviews on both - just because review isn't required doesn't mean one is better than the other.

The two are definitely not equal, IPSE policy does not cover the size of any tax penalties or tax liabilities that arise after an investigation. It seems that the QDOS one does, though I find it hard to believe... is it really that easy, I pay the premium which is likely to be less than the IR35 "extra" tax I have to pay and assume I am out of IR35, If I get investigated and HMRC disagree I only need to pay the excess and QDOS insurance will pay the rest upto a limit? Seems to good to be true.

[SueEllen]

OK you are correct!

I checked on QDOS, what IPSE provide as part of their Plus membership seems to equate to QDOS "Tax enquiry insurance".

QDOS have a TCL35 insurance which seems more like what I should go for :-) particularly as "No contract review required to apply" - thanks for bringing it to my attention!

I suggest you do a search (through google) to see reviews on both - just because review isn't required doesn't mean one is better than the other.

[MPwannadecentincome]

IPSE don't do insurance.

OK you are correct!

I checked on QDOS, what IPSE provide as part of their Plus membership seems to equate to QDOS "Tax enquiry insurance".

QDOS have a TCL35 insurance which seems more like what I should go for :-) particularly as "No contract review required to apply" - thanks for bringing it to my attention!

[SueEllen]

Other opinion seems to think the working practises are more important.
My contract is not IR35 friendly in QDOS opinion. Agency will not change any clauses so I am stuck with that.

Both are important.

Some clients will simply say when asked questions by HMRC refer to the contract. Remember there are people out there who take permanent jobs who at some point were contractors and/or have had lots of involvement dealing with contracts.

While others will stupidly go into detail when questioned by HMRC. With the latter you need to be able to prove that you aren't an employee e.g. had to take unpaid time off because there was no work for you to do.

[northernladuk]

IPSE don't do insurance.

[MPwannadecentincome]

He also said the provider reviewed his contract for IR35 so don't understand if it's the same people why the issue? Something isn't right here.

My insurance with part of the IPSE Plus membership. QDOS reviewed the contract for me.

As far as I can tell the IPSE insurance is just to pay for time for Abbey to deal with HMRC during any review. I didn't look at QDOS insurance, I guess it must be similar or does it cover the tax you have to pay if found to be within IR35 as well (I would doubt it does cover that). Anyway, I suspect that the insurance might not be much use if the Contract fails the review (as it has done) or if the working practises are found to be within IR35. E.g I have to ask for permission for a day off, which is an indication of control.

The people giving me the issue are the agents. An agent friend of mine said when they get requests for a working practise review they support this by getting the client to provide answers. The agent in my case isn't interested.. fair enough I will do as Sue says and when I start I will fill it in.

[MPwannadecentincome]

Most importantly you need to ensure that your contract is IR35 proof and has clear and reasonable other clauses.

Other opinion seems to think the working practises are more important.
My contract is not IR35 friendly in QDOS opinion. Agency will not change any clauses so I am stuck with that.

[SueEllen]

He also said the provider reviewed his contract for IR35 so don't understand if it's the same people why the issue? Something isn't right here.

Yeah you are right - the contract is direct so there doesn't need to be a confirmation of arrangements letter.

The confirmation of arrangements letter is just the providers (whether they are an insurance company or an accountant providing insurance as part of their package) get out clause if it goes wrong. However in this case there isn't an intermediary so it's not needed.

Even if there was an intermediary it's not worth the paper it's written on as it's not a legal contract or evidence showing that you are not an employee. For example having to go home because there is no work to do and having this recorded by email, on timesheets etc is proper evidence that you don't fall within IR35. The confirmation of arrangements letter may say this but you may as well get as much of this stuff in your contract as possible as the contract is legally binding.

[northernladuk]

Provider of insurance.

He also said the provider reviewed his contract for IR35 so don't understand if it's the same people why the issue? Something isn't right here.

[SueEllen]

What do you mean by "provider"?

Provider of insurance.