CHANGE IN TAX INVESTIGATION INSURANCE

One of the many benefits of PCG membership is the bundled Tax Investigation Insurance (TII) policy, which covers members for professional fees relating to any tax investigation including those on IR35, S660A, PAYE, VAT and other matters. Additionally, members may choose to purchase Route 35.

From 1 January 2004, PCG has placed this tax investigation insurance with Brit Insurance Limited for a period of 12 months. Abbey Tax Protection Limited (ATP) will be acting as claims handlers with Lawspeed engaged for their IR35 and legal expertise to deal with the relevant disputes. We believe that separating claims handling and consultancy wherever possible will provide PCG members with the best service possible. This arrangement replaces the policy previously provided by NIG/ULP.

There is also a new name: the bundled policy is now called Professional Expenses Insurance (PEI) rather than Tax Investigation Insurance. The new PEI cover is more comprehensive than the previous TII cover was.

In anticipation of questions from members we have prepared a Q and A paper which will hopefully answer any immediate issues - if however you have any further questions please do not hesitate to contact the office via email at [email protected]

A more detailed copy of this paper will be posted on the web site and the link advised in a subsequent newsletter.

� Why has the PCG changed insurer and claims handler? The previous deal was via ULP with NIG for both the TII and Route35 products. Following a recent change of ownership of NIG, its entire Special Risks portfolio has been put into �run-off� and has been discontinued. This would include both Route35 & TII. In essence, this means that NIG will not accept any new policies in the special risks areas, but will service any existing policies. Any other comparable policies provided by NIG for other organisations will be in a similar position. PCG therefore was forced to find an alternative insurance provider and claims handler and decided to take a fresh and open approach, reviewing all options available. The choice of claims handler is driven by the insurance company, hence the appointment of ATP in place of Qdos. It has been misreported in some quarters that PCG has terminated its relationship with Qdos. We would like to assure members that this is not the case and that PCG continues to maintain a cordial and professional relationship with Qdos. Our thanks go to Qdos again for the excellent service that it has provided members over the past few years, and that it will no doubt continue to provide for outstanding cases. How was the selection of the new insurer managed? A competitive bid process was initiated and PCG directors have been in negotiations with a variety of providers since September. They were advised by specialist broker Roger Borley of Blackmore Borley. The key criteria we looked for were quality of service, rating of the insurer, track record of the claims handler in providing IR35 and S660 advice, price, and the potential to build a long-term relationship. We also insisted that the service was fully underwritten so that members could be certain of cover in all circumstances. Which PCG products and policies does this affect? The change of insurer affects: The TII cover (now called PEI) which is provided as part of the PCG membership fee and includes IR35, PAYE, VAT, S660, Full Enquiry and Corporation Tax Aspect claims Route35, which is an additional scheme that guarantees expert advice and support throughout the whole process of an IR35 investigation and uniquely includes expert professional support during the PAYE compliance visit itself. Is the new policy identical to the previous one? In many areas yes, but we have managed to secure some important additional benefits: The amount of cover on any one claim has increased from �50,000 to �75,000. Members who have submitted their contract to the Inland Revenue for an opinion will still be able to purchase Route35, regardless of the outcome of the Revenue opinion. If the Inland Revenue fails a contract submitted to them, if there is a reasonable argument that the contract should have passed, then the member will now be able to challenge this under PEI (TII). The new PEI now covers members who have had a submitted contract "failed" - providing that the tax is correctly paid as within IR35 on that contract, or that there have been significant circumstantial changes that mean that the original Revenue opinion is no longer applicable. Notwithstanding the above enhancement of insurance cover, it remains PCG's strong advice that members should not use the Revenue's contract review service. What is the new structure for insurance provision? Effective 1 January 2004: Abbey Tax is the agent and claims handler for PCG's tax insurance cover (PEI and Route35). Abbey Tax is providing the PCG Tax helpline support (0845 125 92 52 - free for all general taxation enquiries, note, as before, this service is not for detailed individual tax planning). Lawspeed will provide specialist case support to Abbey Tax for IR35 and S660 cases. Can we have confidence in Abbey Tax? Abbey Tax is one of the largest claims handlers in all elements of Revenue authority disputes, having processed over 6,000 cases since Self Assessment was introduced and with more than 1,000 ongoing cases at any one time. These investigations and disputes include: Income Tax Self Assessment Full Enquiries Corporation Tax Self Assessment Full Enquiries Employer Compliance Disputes HM Customs and Excise VAT disputes IR35 Disputes The Abbey Group has joint ventures with ICAEW, ACCA, ICAS and The Law Society. ATP is also a provider of insurance to many major corporations and businesses ranging from top 50 accountancy firms such as Grant Thornton, Moore Stephens, Saffery Champness and PKF, through to High Street Practitioners in every part of the UK. In connection with its sister company, Abbey Legal Protection, ATP is providing the taxation element of Full Legal Expenses packages to various trade federations, of which the Federation of Small Businesses (FSB) is probably the best known. ATP's senior claims personnel are all ex-Revenue, as are all the investigations specialists and tax consultants that provide advice for the helpline. Many also have experience of working in practice ensuring that there is a commercial edge to advice that they provide. Is Lawspeed equally qualified to provide the best service to PCG members? PCG has a long-term relationship with Lawspeed, which has an outstanding 48-nil record of IR35 results to date. The higher volume of 200 cases successfully defended by Qdos (who were the NIG/ULP claims handlers) is a reflection of the numbers that were assigned via PCG�s TII and Route35 policies. We have every confidence that Lawspeed will maintain its superb record as the volumes of cases it handles increases, and we will be reporting these cases as usual. How is Accountax involved? PCG continues to work very closely with Accountax in its case law strategy and we will be working with them in the coming months on a number of IR35 cases as well as the first S660 case. Who is responsible for handling claims registered/notified prior to 1 Jan 04? Any claims registered/notified prior to 1 January 2004 will continue to be handled by Qdos. If you are already in dialogue with Qdos, this will continue Any claim notified after 1 January 2004 under the new PEI will be dealt with by Abbey Tax. However, under Route35, the purchase date of the Route35 policy will determine who will handle/support the claim. Further advice should be sought from the PCG office. We are working with Abbey Tax and Qdos to ensure that all members are fully covered to at least the level under the previous agreement. If you are about to make a claim, then please contact the office and we will put you in contact with the relevant claims handler. Further Information Cover FAQ http://www.pcg.org.uk/insurance/taxinvest_faqs.html Summary of Cover http://www.pcg.org.uk/insurance/taxinvest_summary_of_cover.html Some final points to remember: If you receive a notification of investigation from the Inland Revenue, you should contact the Tax Helpline on 0845 125 92 52, without delay, for advice. You should advise your accountant that you have legal expenses insurance and the details of the policy. If you need to make a claim, you should contact the PCG office on [email protected] or 0845 125 98 99 who can advise on the claim form completion process from the website. �

PCG TAX AND LEGAL HELPLINES

PCG members are reminded that they have free access to our tax and legal helplines which are available by visiting http://www.pcg.org.uk/members/taxhelpline.html
and http://www.pcg.org.uk/members/legal/legalhelpline.html to answer any general tax or legal related queries you may have. Do note that this is for general queries only and detailed, specific matters or tax planning is not included.

DTI OFFSHORING SEMINAR 2 FEBRUARY 2004

PCG has been invited to attend a DTI offshoring seminar being chaired by the Secretary of State (Patricia Hewitt MP). PCG chairman, Simon Griffiths, will be representing PCG at the seminar to articulate its points of view to DTI representatives and other participating departments and organisations.

25% DISCOUNT FOR MEET, GREET AND PROSPER MASTER CLASS
Thursday 22 January 04 - London Chamber of Commerce

This �How To� master class is for people who realise they need the skills to meet new people as part of their job, but perhaps feel uncomfortable about doing it. Many freelancers do not like the idea of �selling themselves� yet accept that �getting out more� is an important factor in finding work. This will be a fun, lively and interactive three-hour workshop with the author and presenter Roy Sheppard, packed with networking tips and ideas that you will also be able to use straight away, both professionally and socially. �

Roy runs these public master classes every month at the London Chamber of Commerce. He is offering PCG members a 25% discount on the delegate rate of �49 + VAT.�

Full details of this event are available on http://www.Smart-Worker.com

The London Chamber of Commerce is located at: 33 Queen Street, London EC4, and the nearest tube station is Mansion House. To book, ring 01761 414676 and quote �PCG� with your booking to get your 25% discount. Feel free to bring a friend or colleague along too - three or more delegates get a further 20% group discount. The session starts at 6:00 p.m. and finishes at 9:00 p.m.

DISCOUNTED TRAINING SERVICES FOR PCG MEMBERS

Members are reminded that two companies, Maven Training and Creating Careers, provide a range of training courses at discounted rates to PCG members. Details may be found at http://www.pcg.org.uk/resources/Training.html

FLAT RATE VAT

Recent changes to the Flat-Rate VAT rate may make it worthwhile for many members to use the scheme.

From 1 January 2004, the rate applied in IT is 13%. Details are available on the HM Customs & Excise web site at http://www.hmce.gov.uk/forms/graphics/info1703.pdf. Other sectors have also seen a reduction in their rates.

A quick calculation shows that for an IT freelancer whose �inputs� represent less than 12.5% of �outputs,� a small profit could be made by using the flat-rate VAT scheme. The other advantages are that you do not have to add up all those receipts every quarter - you can leave that chore until required for the year-end accounts. You do not have to record all transactions analysed by Gross, VAT and Net values, nor do you need to be concerned about which rates of VAT apply to each of your inputs.

REAL LIFE MEETINGS

Farnborough and environs: Monday 19 January 2004
The Prince of Wales, Rectory Road, Farnborough
This is about 200 yards from Farnborough North station, on the Reading/Guildford line, and about 10 minutes walk from Farnborough Main on the Basingstoke/Waterloo line.� It would be good to catch up with some of the old faces, as well as any newcomers. Forum Discussion:
http://www.pcg.org.uk/threads/showpost.pl?f=meet-6931&p=0&v=c&s=5
Contact: wasADB (Andrew Banks)

Edinburgh: Tuesday 13 January 2004,� 6:00 p.m.
Hi All
Bert's Bar in Williams Street in Edinburgh has confirmed the booking of the Snug Bar for the 18:00 on the 13th January 2004. So assuming we've all sobered up in time to get there, this is where we can get a refill. Forum Discussion:
http://www.pcg.org.uk/threads/showpost.pl?f=meet-6917&p=0&v=c&s=5
Contact: john_ferguson (John Ferguson)

Glos/Wilts/Worc: Wednesday 21 January 2004, 8:00 p.m.
Golden Heart, Nettleton. Post Festivities nosh up. Anyone who wants directions please send private. Regulars have been E mailed but any other takers let me know so I can reserve a table for the right number!! Forum Discussion:
http://www.pcg.org.uk/threads/showpost.pl?f=meet-6924&p=0&v=c&s=5
Contact: haigh (Susie Haigh)

Thames Valley - Maidenhead and locale: Wednesday 21 January 2004, 8:00 p.m
The January meeting of the Maidenhead PCG chapter will take place on Wednesday 21 January in Finnegan's Wake, 43 Queen Street, starting at 8:00 p.m. Please try to arrive by 8.45 p.m. to allow the group to move on to another venue if so desired. Forum Discussion:
http://www.pcg.org.uk/threads/showpost.pl?f=meet-6968&p=0&v=c&s=5
Contact: bergerc (Charles Berger)

London: �Getting to the Decision Makers� AICS, 28 January 2004, 7:00 p.m.
National Liberal Club, 1 Whitehall Place, London SW1
Guest Speaker - David Festenstein, Teleopen Limited
Presented by The Association of Independent Computer Specialists
David Festenstein will give an overview of his approach in the light of the types of challenges experienced by independent contractors in getting to the "decision-makers". He will also give some useful tools and techniques to make your feel more comfortable about using the phone as a whole.
Members �12.50 + VAT. Guests & Visitors �17.50 +VAT.
To include finger-buffet, wine and great networking opportunity.
NB. Gentlemen - the dress code at the NLC is jacket and tie.
Please book your place(s) early by e-mailing [email protected]
For further information about the AICS please visit http://www.aics.org.uk
Forum Discussion:
http://www.pcg.org.uk/threads/showpost.pl?f=meet-6915&p=0&v=c&s=5
Contact: ashmele (John Ashmele)

Disclaimer - caveat emptor - PCG carries only very limited advertising from known and reputable Affiliates, even so publication of any advertisement carries no implicit or explicit endorsement by PCG.

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