Reply to: Contract Review

[malvolio]

You are not serious... I thought everyone knew the original taxman, who set up shop in 1912 in a small office just off Great George Street, was a small chap with a bowler hat and a small moustache called Hector Higginbotham. As the service expanded, he had to recruit more people to keep up, who naturally became known as Hectors.

[christhedon]

Who is Hector?

[malvolio]

Ermm, the PCG is not a company, in case you hadn't noticed, and is not primarily an insurance source, which is why what it provides is different to the general market place. In all such things, you have to be certain you are comparing like with like. You can extend PCGPlus insurance (discounted through Abbey) to get coverage for tax and penalties, if you're really paranoid, but most don't bother.

You should also ask yourself if the QDOS-type example is valid. If they are content you are outside IR35, why do you need the extra premium and cover for penalties and back tax? If the review means anything at all, it is that the penalties will never arise (actually, getting an opinion on your contract status means penalties won't arise anyway, come to that, as per Hector's own rules).

Perceived and long-standing wisdom is that negotiated reviews should be done by B&C, Accountax or Lawspeed, unless you really know what you're looking at and can argue for yourself. Smart people get their insurance as part of their PCG membership, otherwise Abbey or QDOS/Shout99 are probably the other major players.

[christhedon]

The only prequisite for their (PCGs) IR35 insurance is that you are not being investigated by HMRC before...

I also spoke to Qdos (they don't use lawyers but tax specialists. I'm told ex IR persons in some instances).

Qdos IR35 contract review service does not generally include contract negotiation furthermore they have two options:

1) A review to say pass or fail
2) A review which gives all the details of the contract

Passing either would mean that you could apply for their IR35 insurance which covers everything.

Thought since I've been asking lots of questions, I'd post some of my findings.

Any other opinions or 'facts'/observances on these IR35 review companies would be good.

Thanks,

Chris

[malvolio]

I've just asked PCG if there are prerequisites for being able to use their insurances under the PCGPlus membership and am awaiting a response.

None - you have to be a member, not unreasonably. It does not cover any owed back tax or penalties in the case of a loss, but then those that do won't cover you unless they're pretty sure that will never happen becuase you are clearly outside IR35.

The other thing to watch is that some cover is on a contract-by-contract basis, and given investigations can go back 6 years, that could get unweildy. Better by far to have the PCG-style blanket coverage and understand how to stay out of IR35's clutches in the first palce.

[lawspeed]

Survive35 Tax-Safe Insurance

Our review service, if deemed a 'Pass', confirms approval of the engagements for the purposes of taking out Survive35 Tax-Safe insurance.

This insurance underwrites the actual IR35 tax loss (tax, NIC's, interest and penalties) that may arise from a Revenue investigation. The policy is provided by the same insurers that provide the PCG PEI and PCGPlus offerings so it dovetails with them perfectly.

[christhedon]

Hex,

What was the outcome of this? Who did you use and what were your after thoughts?

ALSO: Having spoken to some of these IR35 contract reviewers there appears to be some difference

1) They cost different money - ranging £75 - £210
2) Some of them explicitly state they will negotiate with the agent until the contract is changed. Although the ones that don't I've rang them and they say they "can". One of the firms Accountax I rang twice and first they said they will liase with the agent and the next person I rang said they wouldn't.

I've just asked PCG if there are prerequisites for being able to use their insurances under the PCGPlus membership and am awaiting a response.

Aside from the two points mentioned above what are the differences between the companies Hex outlined in his original post????

Furthermore, what are peoples thoughts on getting Qdos insurance that will pay out if you lose a IR35 case? (Something which PCG does not cover).

Thanks,

Chris

[Mordac]

Bauer & Cottrell are excellent. They are also cheaper than the others, which is a bonus.

[Hex]

With respect, that is not how it has been read. You asked "What value do they bring and why bother with them".

That's certainly not what I meant to ask. My original post stated that I want to get my contract reviewed for IR35 by a professional and asked whether anyone had used anyone from the list I gave. Maybe it was ambiguous?

Anyway, I will read more on the PCG boards and then make a decision as to which one to use.

Thanks everyone for your help.

[malvolio]

With respect, that is not how it has been read. You asked "What value do they bring and why bother with them".

Still think you're asking the worng people though!

[DaveB]

I've used SJD, quick service, sensible comments and picked up a couple of things I had missed that were IR35 relevent.

[Hex]

I know there are a list of contract reviewers on the PCG site. My post here is asking if anyone has used any of them and if they have any comments on their services.

[malvolio]

Well you can't insure against tax owed, that would be evasion. You will notice that the policies that do offer to pay the tax only do so against what they consider to be non-IR35 caught contracts and then only one at a time; the PCG ones covers all of yours in one hit.

The three losees BTW - one represented himself and got it wrong, one was screwed by his client's HR team flatly contradicting the conditions of the contract, one was genuinely caught and really shouldn't have challenged it. I still think the odds of getting caught if you have the right contract and the right understanding with your client about and professioanl help if you need it are pretty low.

[VectraMan]

If you know the "Am I in or not" answer up front, there won't be any tax either way, unless you;re so stupid as to be told you';re caught and then proceed like you weren't. And there won't be any penalties if you have taken steps to get an opinion that Hector happens, ultimately, to disagree with. Plus with a current count of 1200 wins to three losses (two of which were avoidable, remember) I can't see your point as being relevant.

So there's at least one case of somebody that thought they were outside IR35, and yet lost the case? The odds are pretty low perhaps, but then that's why we have insurance to cover the unexpected.

I only pointed out that the PCG insurance doesn't cover the actual tax you might have to pay, which your post implied that it did. Unless I got the wrong idea of what IT Contract agent said. I agree with you that insurance to cover that is a bit of a waste of money.

[VectraMan]

to help prove that I made efforts to fully understand my IR35 status.

I'm not sure what you'd gain from that. It won't change the outcome of an investigation into your status. You can submit your contract to the IR I believe, to get their opinion, which is probably the only opinion they will take note of, but the PCG and others suggest you don't as the IR don't exactly have your best interests at heart.