Protect yourself with IR35 Insurance
IR35 has always remained a confusing term for the contractors. The insurance is basically designed for assessing if the contractor is actually a genuine one or any disguised employee looking for different ways to avoid tax. The self-employed contractors working with their limited companies enjoy a good level of efficiency in tax, however, they are not liable for any kind of employee benefits. Yet, they are quite flexible and have good control over the work they are connected with. Through IR35 Insurance, various owners of limited companies or contractors are found protecting themselves.
It was the decision of the government to rebuild its focus on disguised employment. From April 2017 onwards, the government held the public bodies liable for the outsourced and internal staff pays which is also termed as the right taxable amount. At this period, HMRC came into existence who was given the responsibility to check out more and more tax status investigations by IR35. With the help of IR35, the contractors were able to bring out a clear legal representation for defending the status of tax and presenting the interest if the option of review is asked for at the time of the investigation.
IR35 – Why it is required?
IR35 insurance is continuous as well as complex legislation that can be misread with ease. For the contractors, insurance is a peaceful concept when an investigation is carried out by HMRC, looking for any insurance coverage that covers any kind of tax or even liabilities regarding NIC, penalties, and interest. The HMRC knocks the door for investigation only when any kind of representation is lacking on the side of the contractor regarding insurance. Based on the norms of Qdos, HMRC would determine if IR35 applies to the contractor or not, no matter whether backdated taxes or penalties are worked on. And if IR35 is applied to the contractor, they are sure to pay around 25% additional tax on the earnings they would make in the future.
There are many contractors who have investigated in this insurance and they have been benefited with a good value and it has also reduced the stress of the insurance claiming and its process.
Here are some more reasons why IR35 should be considered for protection.
- Those who are connected with the insurance, HMRC has increased the resources related to the policy which has increased the inquiries.
- The inquiries take a good time period to end up which can extend to years also. You have to be patient to earn its benefits.
- 80% of those caught by HMRC has been found guilty and have paid the bulk amount for proving they are not a part of IR35. So, pay it today and get organized to avoid stress and excess payment.
- If found guilty, HMRC would demand every piece of unpaid taxes, national insurance, interests, penalties, and much more that might run into thousands.
In this way, if the proper tax is paid, it would surely reduce the insurance amount and the outcome, even if the investigation is not carried out.