| | | | Helping you with tax loss cover | | |
Survive35 Tax Safe - Tax Losses Insurance
Protecting the position of Freelance Consultants and Contractors.
IR35 is an issue that just won’t go away – the question for a freelancer is how to deal with it? How to protect their tax position? After all, what a freelancer really wants to do is carry on doing what they do best – contracting – without worrying about whether their world might cave in when ‘the Inspector calls’ with a tax demand for several thousand pounds – money they believed was theirs; income that may have already been spent.
Obviously IR35 primarily concerns the contractor, but it is also an area where accounting practitioners and IR35 service providers can help to ensure that their clients are fully protected.
Freelancers/Contractors
The road to peace of mind involves four easy steps:
Step 1: Take out Professional Expenses (Tax Investigations) Insurance
There are over 1,000 Accountancy Practitioners as well as specialist service providers to the freelancing market which offer Professional Expenses Insurance to their clients.
The idea behind the PEI is to ensure that in an HMRC enquiry you are getting the best advice and representation from someone you know and trust.
Step 2: Get your Engagements reviewed by Abbey Tax:
Abbey Tax provides a contract review service which will provide you with an opinion on your engagement(s) and a full report for £160 + VAT (this is discounted for clients of practices who use Abbey Tax PEI and for PCG members).
If your engagement (s) are judged to “pass” i.e. not caught by IR35 then you can move on to the next step…
Step 3: Insure the potential tax loss:
Some of you will have been contracting well before IR35 and may have contracts that you wish to cover from as early as April 2000.
With premiums starting at £250 per annum for annualised contract values of up to £50,000 and well under £350 for freelancers with contract income of up to £150,000, we would hope that most contractors will be paying no more than their annual fully comprehensive car insurance to cover a tax loss that in some cases will far exceed the value of a high performance executive vehicle.
Step 4: Contact Abbey Tax on 0870 607 7000
And we’ll answer any questions you have got and make sure you have got all the documentation you need to be covered quickly.
Then you can get on with what you do best – contracting!
Accountancy Practitioners
Abbey Tax is a leading provider of PEI – many of you reading this will be clients – but our involvement in the Tax Losses Insurance (TLI) market has largely been in response to specific enquiries and our Survive 35 Tax Safe product is less well known.
We have revamped the product and reduced premiums in order to encourage a wider take-up of TLI. Already the signs are encouraging with a number of firms ranging from those with a handful of contractors to those who would consider freelancing one of their niche markets having expressed an interest in offering TLI.
Some see TLI as merely a service to offer to clients, others to improve their competitive advantage within their market. Where firms are looking to make TLI a compulsory part of their service package, or believe that they have significant numbers of clients that would take out the insurance, then as with a PEI scheme you have there may be scope to package the service on a slightly different basis – particularly if there are any inherent economies of scale that can be achieved.
If you are a freelancer/contractor or a practitioner, please contact, Rebecca Walker, Leanne Stocking or Paul Mason on 0870 607 7000. Alternatively, please email survive35@abbeytax.co.uk
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