QDOS TLC Insurance

[soln]

As my client stopped using Ltd Co from April 2020, I had to take up a PAYE contract through the Agency and from August I am using Umbrella Company.

I had kept my Ltd Co open in the hope that there might be further delay in IR35 reform or I could find some work which accepts Ltd Co.

Given that none of them seems likely I will be looking to close my Company but want to have some kind of insurance in case HMRC starts investigation when I request closure of Company.

I was looking at QDOS as an option given Larsen Howie has now merged with Kingsbridge.

However QDOS requires me to not only accept the Right of Substitution exercise clause but also to purchase Business Insurance like PI/EL/PL which I still have but will not renew when that expires.

The agent I called today said that they can still offer me insurance but not sure if this is a trap.

[ladymuck]

I think Qdos TLC is more for upcoming rather than historic contracts (could be wrong).

Are you looking for an insurance that will cover the costs of having a professional handle a case only, or do you want a policy that will also cover any charges HMRC may impose in case you're found in the wrong?

Make sure you know what policy you want to buy, based on what risk you think you have, and don't go thinking there's only a couple of providers of this kind of insurance.

[soln]

QDOS TLC includes Tax Liability cover which starts at £25K and covers all Tax related enquiries including professional representation. It will cover retrospective contracts and also current.

As I no longer use my Ltd Company I only need for retrospective contracts.

In this forum, people recommend either QDOS or IPSE. IPSE is good but not sure if the plus membership is worth for some one purely looking at tax investigation cover.

[Lance]

you want to buy insurance now, to protect you from investigations relating to a contract that ended in April?
Read the small print.

How long was the contract anyway? Are we talking years?
IPSE+ might be a better bet as their cover is based on membership rather than a specific insurance policy.

EDIT: If TLC covers old contracts as you say then use that. But do read the small print.

[soln]

you want to buy insurance now, to protect you from investigations relating to a contract that ended in April?
Read the small print.

How long was the contract anyway? Are we talking years?
IPSE+ might be a better bet as their cover is based on membership rather than a specific insurance policy.

EDIT: If TLC covers old contracts as you say then use that. But do read the small print.

I spoke to an agent Sushil over the phone and it is all clear about coverage of retrospective contracts as most would be in similar situation as mine who want to cover retrospective activity when shutting down the company.

I should have had this insurance for a while but didn’t.

My query is mainly around holding Business Insurance which I do not need but QDOS is asking me to have when I buy insurance online.

[malvolio]

You don't need IPSE+, basic cover gives you representation for IR35. Be a bit smart witht he discount shopping and it won't cost much anyway. OR any tax-related investigation, come to that...

That said, if your company is closed, it's unlikely you will get investigated anyway - HMRC won't let you close it until they're happy there are no outstanding issues.

PI, however, can come back to bite years down the line. It's not retrospective, but starts when someone makes a claim against you. Depending on what you do, you might want to hang on to it for a while.

[ladymuck]

You don't need IPSE+, basic cover gives you representation for IR35. Be a bit smart witht he discount shopping and it won't cost much anyway. OR any tax-related investigation, come to that...

That said, if your company is closed, it's unlikely you will get investigated anyway - HMRC won't let you close it until they're happy there are no outstanding issues.

PI, however, can come back to bite years down the line. It's not retrospective, but starts when someone makes a claim against you. Depending on what you do, you might want to hang on to it for a while.

The company isn't closed yet. The OP wants insurance in case HMRC open an investigation instead of giving permission to close.

[soln]

You don't need IPSE+, basic cover gives you representation for IR35. Be a bit smart witht he discount shopping and it won't cost much anyway. OR any tax-related investigation, come to that...

That said, if your company is closed, it's unlikely you will get investigated anyway - HMRC won't let you close it until they're happy there are no outstanding issues.

PI, however, can come back to bite years down the line. It's not retrospective, but starts when someone makes a claim against you. Depending on what you do, you might want to hang on to it for a while.

My company is still open but have no active clients at the moment. The current business insurance cover runs out next month.

QDOS TLC was an attractive option as there was some liability cover whereas IPSE is purely representation at same cost. It is a different matter whether QDOS will pay out or renege with some excuse given number of conditions they are attaching at purchase.

The shopping discounts may be useful but without knowing what they are it is difficult to judge.

With Liability Cover, I thought it might be in QDOS’s interest to fight rather than payout the claim as they have skin in the game.

[malvolio]

My company is still open but have no active clients at the moment. The current business insurance cover runs out next month.

QDOS TLC was an attractive option as there was some liability cover whereas IPSE is purely representation at same cost. It is a different matter whether QDOS will pay out or renege with some excuse given number of conditions they are attaching at purchase.

OK, but it is highly unlikely you will get a tax bill, given the level of reperesentation both IPSE and QDOS will represent if it goes to tribunal, so I don't really see TLC35 (or Survive35) as being necessary. It's your call at the end of the day

The shopping discounts may be useful but without knowing what they are it is difficult to judge.

Don't really know since I don't use them. Others have covered the costs of their membership through some fairly routine purchases.

With Liability Cover, I thought it might be in QDOS’s interest to fight rather than payout the claim as they have skin in the game.

No, they haven't. Any PI claim is against you personally (to be precise against your professional competence) so QDOS won't be interested. The whole point of the cover is to defend the claim and pay out if you lose, and that's where it stops.

[soln]

OK, but it is highly unlikely you will get a tax bill, given the level of reperesentation both IPSE and QDOS will represent if it goes to tribunal, so I don't really see TLC35 (or Survive35) as being necessary. It's your call at the end of the day



Don't really know since I don't use them. Others have covered the costs of their membership through some fairly routine purchases.


No, they haven't. Any PI claim is against you personally (to be precise against your professional competence) so QDOS won't be interested. The whole point of the cover is to defend the claim and pay out if you lose, and that's where it stops.

This is assuring. I might proceed with QDOS Tax Enquiry Insurance which is half of TLC35 Cover which only covers tax liability arising if I am caught out as inside IR35.

My last statement was not clear. I was referring to any tax liability from HMRC rather than from my client which is unlikely given I am still working for them via umbrella. I know it was not a good option but there were limited options in April and I felt it is better to earn something and spend on insurance rather than stay on bench which some of my colleagues did.

QDOS has now given in writing that they will still cover me on TLC35 and represent me even if I do not have Business Insurance. I never understood why they even put that clause for TLC35 when that is tax liability cover from HMRC rather than any claims from client.