IR35 Cover - essential protection for outside determinations
HMRC is taking it’s policing of IR35 very seriously, with many end clients and contractor’s PSCs receiving letters pre-empting further investigation by HMRC into the status of contract – are they genuinely outside IR35?
Many of us (most of the recruitment industry!) are dubious about the accuracy of HMRC’s own status tool, CEST, and even more dubious about their claim that they will stand by the output (this is only if the inputs are accurate, something HMRC will clearly argue if they wish to deem it incorrect)
This is why, for any roles deemed outside IR35, GSA insists on, as a contractual requirement, the use of Kingsbridge, for both the determination and for insurance to cover status enquiry defence costs, taxes, interest and penalties.
The cost to the contractor is small, with the (ongoing) use of the status tool covered by GSA.
The benefits are extensive, and not having cover would pose an immense risk, no matter how clearcut a determination might be. There is a very real risk of an investigation that may prove costly to defend.
The Kingsbridge tool was developed by Andy Vesey, ex-HMRC, tax advisor, and a leading IR35 specialist who has defended over 500 investigations, most of which he has won.
To summarise, the cover provided is as follows:
£100,000 of cover for Taxes, interest and penalties from HMRC
When you purchase any of our IR35 Protect products you will receive up to £100,000 of cover for any taxes, interest and penalties for which you are held liable by HMRC, following an IR35 status enquiry. Kingsbridge can also guarantee that your case will automatically be defended if your outside IR35 status review is successfully completed using The Kingsbridge Status Tool or one of our approved IR35 panel members.
IR35 status enquiry defence costs
If you are subject to an IR35 status enquiry by HMRC then this policy can help with your defence bill. All of their Legal expenses and IR35 Protect policies will cover any professional, legal and accountancy fees incurred up to the value of £100,000.
Legal Expenses for tax, VAT, PAYE and NIC investigations
As well as covering expenses for IR35 enquiries, the policy will cover professional fees incurred to defend an HMRC enquiry relating to VAT, PAYE or NIC.
Contract disputes
This cover will provide assistance when you are negotiating legal rights for the purchase or provision of goods or services.
Jury attendance cover
If you are called up for jury service, this policy will cover your loss of salary and wages while off work to attend a court for jury service.
Debt recovery
If you are not paid for the sale or provision of goods or services, you will receive assistance in recovering money owed.
Identity theft
This will provide cover for necessary legal expenses and ancillary costs incurred following the event of a personal identity theft.
Personal injury
This will cover the costs and expenses for both you and your family members' legal rights, following an accident resulting in bodily injury.
For any outside roles, your GSA consultant will explain the process and put your in touch with the right contact at Kingsbridge.
