HMRC have not, and are highly unlikely ever to, publish the way in which they identify the companies to investigate. With this uncertainty, anyone can be investigated for IR35. IR35 insurance can give a contractor operating through a PSC the peace of mind that the costs of an IR35 enquiry will be covered. There are a number of tax enquiry insurance policies on the market, but few fully comprehensive IR35 insurances that will cover you even if you eventually lost an enquiry.
Most tax enquiry policies will usually cover for the cost to defend a number of HMRC enquiries, and usually include IR35 enquiries, but it’s worth checking with your provider that this is stipulated. Things to consider when choosing a policy:
Specifically designed for IR35 enquiries, IR35 insurance is the most comprehensive option. Covering the liabilities, interest, and penalties that you would be found owing should you eventually lose or have to settle an IR35 enquiry, this provides complete peace of mind for any contractor operating via a PSC. Having dealt with IR35 since its implementation, Qdos Contractor innovated this product with contractors in mind.
Tax Liability Cover (TLC35) – This IR35 insurance by Qdos includes their Tax Enquiry Insurance, in addition to cover for the liabilities, penalties and interest if found owing. One of their expert tax advisers will defend you from day one all the way to tribunal, and the policy will cover retrospective contracts. A range of indemnity limits are also available to suit your individual needs.
Looking for more information? Compare IR35 insurance policies