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. Usually all policies will cover the cost of professional representation and some policies may cover any additional tax and penalties that could be levied in the event that you lose the enquiry. The specilisation of Contractor Insurance has become big business due to the specific investigation goals set by the HM Revenue and Customs department.

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. Most polices that cover enquiry costs and representation start around £100 per year and for contractor insurance that begins to cover both representation and possible financial obligations starts around £350 per year.

The price you pay for IR35 insurance is a small price for the peace of mind that it provides. 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. Just as you carry insurance to protect your auto, your professional liability and your home, protecting your business with Contractor Insurance is just as smart. By employing professional help at the very beginning you will avoid the chance of suffering a long term financial problem and be able to work without problems well into the future. 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.