What is IR35 insurance?
IR35 insurance — more precisely called IR35 tax liability insurance or tax investigation insurance — covers you if HMRC opens an enquiry into whether your contract engagements should be taxed as employment rather than self-employment.
A full HMRC IR35 investigation can cost anywhere from £30,000 to over £100,000 in legal fees, specialist accountancy costs, and — if you lose — backdated tax, National Insurance, and penalties. Most contractors could not absorb that kind of bill without serious financial damage. IR35 insurance exists to transfer that risk for a few hundred pounds a year.
No insurer will accept a new policy once an HMRC enquiry has already been opened. This is the most important thing to know about IR35 insurance — it is only available prospectively. If you are currently working outside IR35 and don't have cover, take it out now.
What does IR35 insurance cover?
The main components covered by most IR35 insurance policies are:
- Legal defence costs — specialist IR35 lawyers and tax barristers to challenge HMRC's assessment
- Accountancy costs — your accountant's time in dealing with HMRC correspondence, appeals, and hearings
- Tax liability — the backdated income tax and National Insurance HMRC says you owe if you lose
- Interest and penalties — HMRC charges interest on late tax and can levy penalties; these are typically included up to certain limits
- Appeals — most policies cover costs through the First Tier Tribunal and beyond
What is not covered: the policy does not protect you if you have deliberately falsified records or acted fraudulently. It also does not cover penalties in cases where HMRC can demonstrate deliberate non-compliance.
How much does IR35 insurance cost?
The premium depends on your contract value, the policy limits you choose, and whether you want cover for just yourself or for the wider supply chain. Here is a general guide to pricing in 2025/26:
| Contract Value | Qdos (approx.) | Kingsbridge (approx.) | Cover Limit |
|---|---|---|---|
| Up to £50k/year | from £99/yr | from ~£199/yr | £100k–£250k |
| £50k–£100k/year | ~£150–£200/yr | ~£250–£350/yr | £250k |
| £100k–£150k/year | ~£200–£300/yr | ~£300–£500/yr | £250k+ |
| £150k+/year | Quote required — contact provider directly | Custom | |
Prices are indicative for 2025/26. Always get a quote directly from the provider for your specific contract value and circumstances.
At £500/day and 220 days, your annual contract value is £110,000. Losing an IR35 investigation on that engagement could trigger a tax bill of £30,000–£60,000 plus legal costs. A £200/year premium to cover that risk is less than two hours of your billing rate.
Qdos IR35 Insurance
- Legal defence costs covered
- Tax liability up to £250,000
- NI and interest included
- Covers First Tier Tribunal appeals
- Also offer contract review service
- FCSA-accredited, well-known brand
Sponsored link. Qdos also offer IR35 contract reviews from £99 if you want a status assessment alongside your insurance.
Qdos is the most recognisable name in IR35 insurance and has been around since long before the 2017 and 2021 off-payroll reforms. Their IR35 Tax Liability Insurance is a straightforward annual policy: you pay a premium based on your contract value, and they cover your defence costs and tax liability if HMRC investigates.
One notable aspect of Qdos is their in-house legal team — they do not subcontract IR35 defence work. Their specialists have handled thousands of IR35 enquiries and have a strong win rate. They also offer a contract review service separately, which gives you a written IR35 status opinion from a specialist.
Kingsbridge IR35 Protect
- Legal defence costs covered
- Tax liability and NI covered
- Can cover fee-payer (agency) too
- Popular with recruiters and agencies
- Flexible policy structures
- Strong track record on claims
Sponsored link. Kingsbridge also offer a full suite of contractor insurance products.
Kingsbridge IR35 Protect is the other main player and is particularly well-known among recruitment agencies. One of its differentiators is that the policy can be structured to protect both the contractor and the fee-payer — the agency or client who made the outside-IR35 determination. This makes it attractive where your agency wants assurance that the supply chain is covered.
For contractors, the practical difference between Qdos and Kingsbridge is small — both are reputable, both cover what matters, and both have handled significant IR35 cases. Kingsbridge tends to be slightly more expensive at entry level, but offers more flexibility for complex supply chain arrangements.
Qdos vs Kingsbridge: which should you choose?
| Feature | Qdos | Kingsbridge |
|---|---|---|
| Entry price (low contract value) | From £99/yr | From ~£199/yr |
| Tax liability cover | ✓ Up to £250k | ✓ Up to £250k+ |
| Legal defence costs | ✓ In-house team | ✓ Included |
| Fee-payer (agency) cover | ✗ Contractor only | ✓ Optional add-on |
| IR35 contract review included | ✗ Separate (from £99) | ✗ Separate |
| Best known for | Contractor-direct policies | Agency & supply chain |
In practice: if you are a contractor buying cover for yourself, Qdos is typically the better starting point — lower entry cost, established IR35 specialist, in-house legal team. If your agency has asked you to have insurance or if you want the fee-payer covered as well, Kingsbridge is worth a quote.
Do you need IR35 insurance?
Outside IR35 contractors
If you are working outside IR35 through a limited company, IR35 insurance is close to essential. Here is why:
- HMRC can investigate at any time, even years after a contract ends. You have no way to predict or prevent an enquiry.
- Even correct status can be expensive to defend. If HMRC opens an enquiry and you are right, you still need to pay legal and accountancy costs to prove it — and these are not reimbursable unless you go to court and win explicitly.
- The 2021 off-payroll reforms shifted risk to engagers for medium and large clients, but for small company engagements (and all pre-2021 contracts), the liability sits with you personally.
- Historic contracts are still at risk. HMRC can look back 4–6 years, and older contracts were made when you were responsible for your own status determination regardless of client size.
Inside IR35 contractors
If you are working inside IR35, your engager should be deducting the correct PAYE and NI. In that case, there is no tax liability for you personally to insure against — the risk lies with the engager if they have got it wrong.
However, there are two situations where inside-IR35 contractors might still want cover:
- Historic outside-IR35 contracts. If you had contracts before the off-payroll reforms, or contracts where you self-determined as outside IR35, those remain your liability. Insurance covering those historic periods is still valid and worth having if you have not already.
- Disputes about current status. If you believe your current engagement should be outside IR35 but your client has put you inside, a dispute about that status could still generate an HMRC enquiry. In that scenario, general tax investigation insurance may provide some comfort.
From April 2026, the small company threshold increases — meaning more of your clients qualify as small and you self-determine your own IR35 status again. With self-determination comes personal liability, which makes insurance more important, not less. See our April 2026 threshold changes guide for the full detail.
What affects the price of IR35 insurance?
Several factors push your premium up or down:
- Contract value — the higher your annual contract income, the greater the potential tax liability HMRC could claim, so premiums scale with turnover
- Number of contracts — insurers want to know how many live engagements you are covering; some policies cover a single contract, others cover all of your work
- Cover limit — choosing £100k vs £250k cover will affect the price; given the potential exposure, most specialists recommend £250k as a minimum
- Prior investigations — if HMRC has previously investigated you, insurers may decline or add loading; a clean record keeps premiums low
- Contract sector — some sectors (financial services, public sector) carry higher IR35 scrutiny and may attract slightly higher premiums