IR35 Insurance Can Protect You From Maxwell’s Silver Hammer
HM Revenue and Customs may be knocking on your door if you are not careful. Since 2000 when IR35 became law many free lance contractors have fallen victim to investigations by the revenue department and many times with disastrous results. IT contractor insurance has become a normal cost of doing business that any one performing personal services contracts can no longer afford to be without. Using IT contractor insurance to protect your savings is a smart move in a time when the government is trying to collect all the taxes that they can. Tougher penalties were imposed during 2009 to make the avoidance of paying taxes more confiscatory and the ability to negotiate away much of the financial burden was removed from the law.
Contractor Insurance or IR35 insurance as it is often called is a small price to pay in the event that you must defend yourself against charges that you have violated the rule. There are a number of different levels of coverage and each depends on the type of coverage that you select. Most policies will cover legal fees up to a certain point for a single fee but you can also add protection that can cover any tax and penalties that may be imposed should you be found to not be in compliance with the law. IR35 insurance has become a specialized business since the full implementation of IR35 in 2000 and it continues to be a growing industry due to the increased number of investigations being conducted.
A good IT Contractor Insurance policy should cover you from the beginning PAYE compliance visit that is the initial step in an investigation and cover your representation at all levels of the investigation as well. If you have been on your own for a long period of time, you would be wise to protect yourself from the confiscatory penalties and additional tax that you may have to pay should your contracts not be incompliance with IR35. For a single contractor it is possible to find annual coverage that is less than 300 pounds per year and that should protect you against most legal fees and a lot of the penalties and tax that you may have to pay.
Knowing that you are protected from a catastrophic loss in the event of an enquiry will give you peace of mind to pursue additional free lance work. It protects you from the worries of having your business interrupted while you go through the investigation and can save you a huge amount of money if you plan correctly. Insuranc today is not just for your home and car, it extends into your business life as an independent contractor. Avoiding long term financial problems with the HMRC is just good business today and it shows that you are taking reasonable care when conducting your business affairs. Just like the tools you may have or the education you must continue, IT contractor insurance will keep you free from the worries of financial issues. Provide for your family by protecting your source of income just as carefully as you provide care for your clients.