Professional Expenses Insurance (PEI)
It is a condition of the Survive35 TaxSafe Cover that a Markel Tax PEI Policy is in place. This is to ensure the cost of your defence in the event of an HMRC Enquiry is covered.
The insurance can only cover those engagements for which the contracts and contract extensions have been reviewed by a Markel Tax approved contract reviewer and ‘passed’ as being outside of the IR35 regime. Please provide details of the contracts – and extensions to those contracts – which are to be covered, starting with the earliest.
Having listed the names, dates, and contract values, then you will need to decide which premium band they fall into based on annualised value of the contract. Hopefully, the wide range of bands will not make this exercise too complicated. Please contact Markel Tax if you have any queries.
The premium is calculated by reference to the aggregate annualised value (excluding VAT and any expenses that your company has claimed) of all contracts within the financial year, which have passed IR35 Status Reviews. If the value of your contracts exceeds the amount that you declared on your application form, then Markel Tax must be notified immediately, as additional premium may be payable.
The requirement for Professional Expenses Insurance
Once an engagement has been insured, there is no need to “renew” its cover; you only pay for additional Survive35 TaxSafe if you have contracts or extensions which run beyond the period for which Survive35 TaxSafe has been purchased.
Your engagement(s) will remain insured for as long as you have Markel Tax PEI in place. This PEI is a claims made policy which covers the cost of your representation in the event of an enquiry. Following an IR35 dispute (the defence cost of which will have been covered by your PEI), if there is any additional liability, at this point you would make a claim on your Survive35 TaxSafe.
Please note, that if you cease trading, there is an ‘enquiry window’ during which HMRC can still open an enquiry into your affairs, and your contracts will still be at risk. In order to ensure your contracts remain covered, you must maintain your PEI throughout this period.
How to buy
For more details on how to arrange Professional Expenses Insurance for your business, visit the Markel Tax website.
If you would like to speak to one of our IR35 experts about your IR35 status, please contact 0333 321 1403 for details and to book an appointment.