Contractor IR35 Insurance
During recent consultation, HMRC have made it clear that IR35 is here to stay, and the rules will likely be tightening to encourage compliance, as well as an increase in enquiries.
Dealing with HMRC yourself - particularly in an IR35 enquiry - is difficult, and it’s far better to have someone with experience of handling investigations to fight your corner. Having IR35 insurance in place will provide the reassurance that, even if the worst was to happen, you wouldn’t be facing a potentially crippling sum.
There are two types of policy available to contractors that will cover tax and IR35 risks:
Firstly you could consider a basic tax enquiry insurance policy, which will cover an expert’s fees in handling your case in the event of an HMRC enquiry. This means that as soon as you get a letter from the Revenue notifying you of a review or enquiry, you can send it to the expert and they will handle things from there.
A more popular option is to take out a full policy, which will not only cover an expert defending your case in any HMRC enquiry, but also the liabilities if you are subsequently found to be caught by IR35. Given that being found to be inside IR35 is likely to result in a demand running into the tens of thousands of pounds, it is obviously a risk that many contractors are keen to avoid.
ContractorUK has partnered with Qdos Contractor (the author of this article), who can provide contractors with an appropriate IR35 insurance policy. Qdos are well established contractor specialists; they have defended over 1,500 cases and saved contractors over £35million in tax. Click here to view their website and buy online.