Becoming a contractor doesn’t mean you’re a lone wolf in business. With the right insurance and legal protection, you can pursue your career with confidence, knowing that you’re protected against mishaps, disputes and even physical injury, and making your work legal in the eyes of the law.
However, it’s important to understand what protection you must gather as a contractor; failing to do so will open you up to all sorts of questions regarding the status of what you do, and leave you vulnerable to problems further down the line. With this in mind, let’s explore the insurance and legal protection available to you as a contractor:
IR35 Review
When drawing up a contract, especially one lasting several months, HMRC will be on your back to scrutinise the particulars of the agreement. The wording of the contract and how the stipulations are actually met – i.e. how your proposed involvement with a client pans out in reality – decides whether or not you’re classed as an employee, which can drastically affect your net income.
Our contractor accountants can review each contract you draw up on our Team package. We’ll tell you what changes (if any) have to be made so it falls outside of IR35 stipulations, leaving no stone unturned when securing your earnings.
Public Liability Insurance
As a contractor, you need to insure against the risk of accidents when working with a client – even in a low risk environment such as an office. You’ll be responsible for your actions in the event of an incident, so cover is essential if you want to give clients peace of mind when taking you on. Insurance plans can be adapted to the scope and nature of your trade, to foresee any risks that could be associated with your business.
Professional Indemnity Insurance
Another form of insurance that can bolster your profile is professional indemnity cover, which protects you against claims made by your client for damage to their finances or reputation.
We all know that human error can undo our best-laid plans – this insurance shields you from a blunder, poor organisation, or even false allegations. Many businesses won’t look twice at a contractor unless they have this cover.
Tax Enquiry Insurance
HMRC are notoriously dogmatic for probing the ins and outs of your contracts and tax returns, and they may find it necessary to get in touch with a few questions about your paperwork. It’s useful to have an accountant to deal with this, if only to palm difficult answers off to an expert.
Your time is precious; no-one wants to get bogged down in the minute details of small print. Let your accountant do the work for you, at a reasonable price, and never worry about explaining yourself again.
Contracting has an unbridled sense of possibility that appeals to more and more professionals. However, it’s vital to sort your insurance and legal status out, paying attention to detail and issues that can arise from client relationships. Taking out extensive cover and partnering with a team of specialist accountants, like us, will secure everything that’s important for making an independent living.
For more information, call 0161 669 4221 or email Info@biaccountancy.com to speak to a member of our team.
