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Professional Indemnity Insurance? One of the questions in new HMRC IR35 tests.

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Following the controversy generated by the news that up to 2000 staff within the public sector were claiming self-employed status, HMRC has developed a series of illustrative tests to determine whether the IR35 rule should apply in specific cases. Still subject to consultation, each of the tests scores a certain number of points which can then be aggregated to assess whether an individual is really self-employed or not. One of the proposed questions asks of you need to have professional indemnity insurance – and if the answer is ‘yes’, it will score two points.

In other words, not surprisingly, HMRC seems to be suggesting that if you are responsible for arranging your own professional indemnity insurance, it could well be an indication that you are not an employee of a third party.

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