Topological insulators are materials which are insulating in the bulk, but conducting on their surfaces. The existence of the conducting states on the surface is guaranteed by the topological properties of the bulk and they are therefore very robust even in the presence of impurities, as long as the time-reversal symmetry is maintained. The surface states are helical (spin polarization depends on the direction of the electron motion), which leads to the suppression of backscattering and to other unusual properties. In the presence of magnetic impurities, however, the gap can open even on the surface, since the time-reversal symmetry is broken if the impurity moment remains unscreened. I will show that the Kondo effect exists even in helical electron liquids, thus the question if the impurities are effectively magnetic or not becomes rather more subtle.