Insurance policies to stave off cash shortfallContractors are being offered the chance to insure themselves against any negative financial after-shocks the controversial IR35 legislation might create. The Professional Contractors Group has created a policy, in collaboration with tax consultants Qdos Consulting, which contractors can take out against unexpectedly being taxed as a "disguised employee". The annual premium for the service is £460 per tax year. Anyone taking out the insurance will also have to pay £249 +VAT for an assessment of their tax status. The policy is backed by the National Insurance Group, making it the first policy cover for IR35 liabilities that is actually backed by an underwriter, according to Steve Greenwell, director of Qdos. Gusharon Degan, tax consultant with specialist IT accountants 3 sixty group, cast doubt on the value of insurance against IR 35. She said: "If it was worth it, we would offer it ourselves. "They normally require changes to be made in the small print of the contracts between contractors and the companies they work for. If the contractor doesn't comply with those conditions it would invalidate the policy. I think it's comparatively rare that there are ever payouts on these things." However, Greenwell confirmed that they would only insure people with certain key clauses in their contracts, which reduce the likelihood of their being liable under IR35. Greenwell defended the value of the policy and said: "The level of risk under IR35 and the possible payouts can be very large. We're offering people the chance to draw a line under their liabilities for the year. The peace of mind we are offering is very good value on its own, and we have had a lot of demand."