Contractor Insurance including IR35 Insurance and Contract Review
All contractors should take out IR35 insurance. Firstly, if they don’t buy IR35 insurance they could end up in a fight with HMRC for years without any support.
IR35 is a tax legislation implemented by HMRC that targets contractors regarding their professional status and position of tax.
It was first issued in the year 2000 as a means in which the treasury could clamp down on tax avoidance within the contracting sphere, pointing at contractors, therefore, who, in the eyes of HMRC, are classed as ‘disguised employees‘.
The concept of the disguised employee stems from the fact that as technically self-employed professionals, contractors are in no way employed by the firm they may be working for.
This is because they are in fact working through their limited company and are hired on contract bases by another business that may require the skills of the contractor.

Because contractors are not employees, in turn they are not taxed like employees. This results, therefore, in a lower tax bracket and thus a higher percentage of take home pay. Basically, pound for pound, contractors pay less tax than the average employee.
HMRC Adamant
As a result of this, HMRC are adamant to ensure that those working as contractors (and paying less tax) are indeed fully self-employed. They should not still work in the same way they did when in employment.
The ‘disguised employee‘ is the name given to this concept. So if a contractor is seen as benefiting as an employee, whilst still working as a contractor, they fall within the IR35 legislation.
Falling under IR35 can result, therefore, in huge financial impacts to the contractor. Moreover, payments made to the tax office can be huge and devastating on a limited company and the individuals involved.

IR35 Insurance
When it comes to protection against the threat of IR35, contractors can take out IR35 insurance as a means to cover themselves financially, whilst maintaining peace of mind.
Contractors, as sole traders and shareholders of their limited companies, are most often 100% liable should any mistake or misfortune occur professionally. Because of this a number of specifically designed contractor insurance policies exist.
Below is a list of quality IR35 insurance and other insurance products.
Tax Liability Cover (tlc35)
– Covers all legal costs and liabilities if you‘re caught by IR35
– If you are found to be ‘inside‘ IR35, the policy pays out all backdated tax, NI, interest and penalties. A consultant deals with your case from start to finish
– Covers all retrospective tax years
– Standard policy provides £50k of legal costs and £50k of liabilities (can be increased if required)
– Buy online in minutes – no contract review required
– Just £30 per month or £360 per year.

Public and Employers Liability
Essential policies to any contractor concerning safety and potential error against members of the public or employees. If you are responsible for an injury to an employee or 3rd party this covers you for it. So, if you are in an office environment then your exposure is low and so your premiums will bw low. Moreover, there may be statutory obligations for you to have this insurance before you are accepted on a contract.
Freelancer Tax protection
Tax protection and costs covered for any freelance/contractor. This IR35 insurance provides you with expert defence for any HMRC enquiry. If HMRC come calling you will have an expert fighting your case for you. The expert will handle all correspondence with HMRC.
If you prefer, you could upgrade to the Tax Liability Cover above where not only defence costs are met but any tax, NIC, interest and penalties are covered too.
IR35 Contract Assessment
Contract assessment regarding IR35 and professional status.
It is a great way of showing that you have had expert guidance when determining if you are operating outside of IR35. This can reduce your risk of penalties. IR35 experts revie the contracts.
We will assess your contract to see if it passes or fails the IR35 test.
If it’s a Fail, we will show you which points need to be amended in the contract. We will re-assess it after changes have been made and will liaise with your agency if you want us to.

If you are new to contracting and want a more thorough review you can purchase the Full Contract Review for just £99 plus VAT.
Full IR35 Contract Review
Full contract review concerning IR35, ensuring compliance and sufficient measures.
In an IR35 enquiry HMRC will ask for a copy of your contract and they will check it with the client to see if the actual working practices are the same as in your contract or different.
A contract and working practices review lets you ensure your compliance with the relevant evidence. It shows HMRC that you have taken steps to comply with IR35.
We will look at each relevant clause in your contract and give you a PASS or FAIL and an overall PASS or FAIL. It will explain why each clause or positive or negative.
If it is a FAIL overall we will suggest changes. Even if it is a PASS we will show you how it should be improved. We will liaise with your client if you want us to.
Working practices are often more important than contract clauses and we will help you make sure these are aligned.
If you takeout a Full Contract Review as well as a Confirmation of Working arrangements Document, once we have decided that you are outside IR35 we will provide you with a FREE Certificate of IR35 Compliance.
– Jury Service and Legal Protection
Cover against the costs of jury duty or any other legal expenses.
This is designed specifically for contractors. It provides up to £50,000 in expenses for a variety of legal risks. It includes cover, therefore, so that you still get your income if you are called up for jury service.

– Office Protect Insurance
Insurance for small businesses, covering damage or loss of office materials and other expenditures. This covers a variety of risks which small businessmen like contractors can come up against. Contact us for more details.
– Travel Insurance
Annual travel insurance (can include high risk activities and locations and multiple covers).
This, therefore, covers both business and leisure trips. It can cover family members. It can cover higher risk sports like skiing and make sure you still receive income if you have a problem.
To enquire about any of the above Insurances click on Insurances for IT Contractors