In the event of an IR35 enquiry from HMRC, workers may have to argue their case to show that the rules shouldn’t apply to them. This can be a lengthy and complicated process, which is why IR35 insurance is a valuable service to consider.
In this article, we examine Qdos IR35 insurance to understand what it covers and whether it’s suitable for you.
Scroll down for some common FAQs.
What is Qdos IR35 insurance?
Qdos is a market-leading specialist tax consultancy with extensive experience handling IR35 legislation. Their IR35 insurance provides contractors with tax liability cover and expert support in the event of an enquiry.
Get an IR35 insurance quote now from Qdos.
Because IR35 enquiries are often drawn-out and stressful, having insurance means you’ll be financially protected — and supported by an expert from day one.
Qdos has defended over 1,600 IR35 cases and is trusted by thousands of contractors. They offer two key products: Legal Protection Insurance and TLC35 Tax Liability Cover.
What is Legal Protection Insurance?
Legal Protection Insurance (previously referred to as IR35 enquiry insurance) gives you access to expert representation during HMRC enquiries. Qdos handles all correspondence on your behalf and provides peace of mind throughout the investigation process.
This policy is available to limited company contractors and freelancers. It helps cover the costs of defending yourself if HMRC opens an enquiry into your tax affairs.
What’s covered by Legal Protection Insurance?
The policy includes up to £50,000 of representation costs per claim and covers:
- PAYE compliance reviews
- IR35 enquiries
- PAYE or National Insurance Contribution disputes
- VAT disputes
- Section 660A disputes
- Other enquiries related to your tax returns
You’ll also receive a free IR35 contract assessment as standard. All claims are managed by Qdos’s in-house tax team, which includes former HMRC inspectors. Pricing starts from around £99 per year.
How does Tax Liability Cover (TLC35) work?
TLC35 is a more comprehensive insurance policy. In addition to covering enquiry representation (as above), it also pays for any tax, interest, and penalties owed if HMRC successfully challenges your IR35 status.
This makes it particularly valuable if you work with small clients and remain responsible for your own IR35 determination.
Features include:
- Representation during HMRC enquiries
- Tax, NICs, interest and penalties paid on your behalf (up to your chosen indemnity limit)
- Unlimited IR35 contract assessments
- Access to Qdos’s expert tax team (all ex-HMRC)
Indemnity levels range from £25,000 to £250,000, and the standard policy excess is £250. Pricing varies depending on your risk profile, but starts from around £250 per year.
Protect yourself from tax investigations with legal protection or tax liability cover.
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IR35 insurance at a glance
- Legal Protection Insurance: Covers up to £50,000 in enquiry defence costs. Includes contract reviews. From ~£99/year.
- TLC35 (Tax Liability Cover): Covers defence costs plus any tax, interest and penalties owed. Indemnity up to £250,000. From ~£250/year.
Common IR35 insurance FAQs
1. Do I need IR35 insurance if my client is responsible for my IR35 status?
If you have only provided services outside IR35 for medium or large private sector companies – or public sector bodies – since April 2021, you are unlikely to have any IR35 liability risk. Whilst HMRC can technically go back six years, this would only happen in specific circumstances, which are highly unlikely to relate to IR35.
Irrespective of the above, if you have continued to operate through a limited company, you are always at risk of an HMRC compliance check or investigation into other matters. It’s therefore advisable to carry insurance to cover expert representation costs, even if you do not require full cover for IR35 liabilities.
It’s very important to note that the off-payroll working rules don’t apply to small businesses, meaning that contractors engaged by firms that are classed as small remain responsible for determining their IR35 status and carry the can for mistakes. There are thousands of consultancies which engage contractors who would fall into this category – particularly given the Government is adjusting the company size thresholds to bring more businesses into the ‘small’ category.
If you are providing services for such a client, you will therefore have a direct liability and may benefit from full IR35 insurance.
2. Does Qdos insurance protect my company from any other type of tax investigation?
The representation costs element of our tax insurance policies is extensive, protecting contractors from a range of HMRC enquiries, in addition to IR35-related disputes. This includes: PAYE compliance reviews, PAYE/NIC disputes, VAT disputes, Managed Service Company (MSC) investigations, Section 660A and any aspect of an HMRC enquiry.
3. Do I need IR35 insurance if I’m working through an umbrella?
Because contractors working through umbrella companies operate on the payroll of the umbrella and are therefore subject to PAYE tax, IR35 compliance isn’t a consideration.
That being said, HMRC can still investigate contractors for contracts held before they started to work via an umbrella and – if you switch from umbrella working to contracting regularly, which is common for many contractors – having an IR35 insurance policy is a wise choice.
4. If I shut down my company for good, should I keep my tax enquiry insurance running for a period of time?
Once a company has been formally struck off – and assuming HMRC hasn’t objected to its closure – the risk of any enquiry into the company itself (which would include IR35) is negligible.
HMRC can also open checks into your personal self-assessment return, though, which is independent of your company. The tax office has 12 months after the filing date of your return to do this.
Qdos has successfully defended over 1,600 IR35 enquiries. Protect your company with trusted IR35 cover.
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