contractorsIR35: Why it’s important for our PSC contractors to hold business insurance
As we’re sure you’re all aware by
now, the private sector IR35 reforms will come in on 6th April this year –
that’s less than three months away. This means it’s important that you, as a
PSC contractor, are doing all you can to make sure you’re on the right side of
IR35. Of course, if you’re genuinely operating outside of IR35 then there’s no
cause for concern, you will simply need to be able to demonstrate it when
required.
Operating as a
business in your own right
The key to showing that you’re
legitimately working outside IR35 is to be able to demonstrate that you’re
operating as a business in your own right and therefore are not an employee,
disguised or otherwise.
Holding
business insurance has always been a helpful indicator of being in business on
your own account and therefore working outside of IR35. Insurance demonstrates
clearly that you are taking on contractual risks and liabilities as you are
taking steps to protect yourself.
Setting yourself apart
from employees
Having the correct insurance cover
in place is a demonstrable difference between a contractor and an employee.
Insurance is simply not a requirement for an employee as they would be covered
by their employer’s own provisions. Therefore, the holding of insurance
demonstrates a clear distinction between you and an employee.
There are also some other factors to consider. The taking on or presence
of discernible financial risk is also a key indicator of working outside IR35.
The fact that you, as the PSC, have had to purchase professional indemnity
insurance demonstrates a financial obligation and a responsibility to protect
your interests.
Ensure you have the
correct cover for your needs before 6th April
As a
business, we require all of our PSC contractors to have professional indemnity
and public liability cover in place as standard and would certainly recommend
any other PSC contractors to hold the appropriate insurance. It’s good business
practice to ensure that you’re taking responsibility for your work and actions and
it protects you should anything unforeseen go wrong. So, it’s a nice added
bonus that it also helps indicate your IR35 status as well.
The window of time between now and the IR35 reform in the private sector
is growing rapidly smaller every day, especially as we’re now in 2020 and it’s
now happening this year. Organising your cover is quick and easy, but it
still makes sense to act sooner rather than later.
If you
have any questions about business insurance, or you think you may not currently
have the right cover in place, you can talk to our insurance partner –
Kingsbridge to make sure you’re all set before 6th April rolls
around.
Call: 01242 809 317
Email: sam.steel@kingsbridge.co.uk
Get a
quote: edgetech.kingsbrige.co.uk