Fee Protection Insurance

Take the stress and escalating costs out of tax investigations - No one is safe from HMRC

What is a tax investigation?

When HMRC make enquiries into your tax affairs

Many tax investigations are random. Unusual fluctuations, unannounced accounts and random spending can also prompt an enquiry into individuals and companies. The tax man has the power to inspect business documents and assets at your premises, ask for documents and information, make unannounced inspections and go back up to six years to investigate matters. Disruptive, intrusive and expensive - when HMRC investigates it can drag on for a year or more, creating mounting costs and rocketing stress levels.

And HMRC is upping its game…

£900 million has been allocated to target tax evasion, in a bid to fill the public finance black hole. The HMRC recuperated £26.6 billion worth of tax last year, with 1,289 of these investigations resulting in prosecutions. Powerful new software can trace even the smallest discrepancy in spending or earnings, prompting an investigation into individuals and businesses. What could the HMRC discover about you and your business?

Could you be affected?

Anyone who submits a tax return is a potential target

No matter the size of your business or if you haven’t done anything wrong, HMRC can launch a tax investigation at any time.

There doesn’t have to be a specific reason.

When everyone is feeling the economic pinch, the risk of an inconvenient, expensive and time-consuming tax investigation is higher than ever.

Call in the experts

If HMRC states its intention to investigate your tax payments don’t panic. Call us – your dedicated accountant and best defence.

We will translate the many complicated questions the taxman may pose, manage the entire conversation with the taxman, help you submit any required information and minimise the impact on your business or personal accounts.

However, the cost of supporting you throughout an investigation is not covered in our usual accountancy fees.

This is where tax investigation insurance comes in.

Protection Available

Peace of mind providers

As your dedicated accountant, we’re here to help you navigate any tax enquiries you might receive.

It is vital to be led by specialist advice and guidance when dealing with the HMRC.

And with the tax investigation insurance, our fees will be completely covered no matter how lengthy or complicated the investigation process.

By taking out a policy, you’ll also be dealing with a trusted and familiar face that knows your affairs – not an unknown accountant who may be appointed if you join an alternative scheme.

We believe that we know your business best and we want to be there for you when you need us most.

Cover for all…

Plus, for limited companies and partnerships, the tax investigation insurance provides inclusive cover for all relevant individuals.

So if your business takes out a policy, all of your directors, partners and their spouses and company secretaries will also receive representation during an investigation into their personal or business tax affairs.

Just spend a little now to potentially save a lot later and take the stress, time and professional costs out of a tax investigation.

Put a side a few minutes to protect yourself.

Call the Elman Wall Tax Team on 020 7600 5667 to find out more.

FAQs

Most tax enquiries are generated by computer “risk profiling” and many are selected completely at random. As a result, HMRC sometimes picks the wrong targets. Even if you have done nothing wrong, the taxman will not give up and will still try hard to find errors.

Anyone who submits a tax return can come under scrutiny. Every year, HMRC start enquiries into many thousands of personal and business tax returns and accounts. VAT and PAYE payments are also thoroughly checked. The aim in every case is to collect more tax. HMRC has raised an extra £9 billion over the last three years and in 2012/13 the number of tax investigations increased from 119,000 to over 237,000 – in just one year.

Not paying the annual cost could be a false economy. The potentially high costs of defending you in an enquiry would be much less affordable than the small annual charge. One thing is certain – HMRC does not stop making enquiries into tax returns when there is an economic downturn. The amount of debt the government is in at present is only likely to increase the potential threat of an investigation!

Like any other protection to meet an unexpected cost, everyone hopes that they don’t need it but when a costly enquiry starts, clients are glad that they’ve paid the small annual charge.

Such cover will normally be limited and not as wide ranging as the practice service. Such policies may not pay our fees to look after you and may instead bring in an outside consultant who doesn’t know you.

The questions asked by HMRC are usually very detailed and time-consuming to answer. The costs of defending you can easily run into thousands of pounds, even if little or no extra tax is paid at the end of the enquiry. These costs are not protected by the normal annual fees paid to us.

You can subscribe to our Tax Investigation Policy which will protect you for the work and costs of defending you in the event of a tax enquiry by HMRC.

It is a Policy set up by us in conjunction with Professional Fee Protection (PFP) to protect clients who suffer a tax enquiry. For a small annual fee, you can join the Policy and obtain the benefits described on the Policy Summary. The Policy is backed by an insurance policy that the practice has arranged through Professional Fee Protection. When you subscribe to our policy we are able to make a claim against our insurance policy held with PFP in respect of our fees incurred.

  • We will defend you, if and when you are selected for a tax enquiry by HMRC.
  • The potentially high costs of professional fees for that defence will be claimed under the practices’ insurance policy.
  • It will not be necessary to accept unreasonable tax charges by HMRC due to concerns about professional fees.
  • You will also get free access to a 24/7 business legal helpline.

Under the policy, subscribing clients will be fully protected and the practice will claim under our own insurance policy for up to £100,000 of professional costs, in the following circumstances:

  • A HMRC enquiry into a personal or business tax return
  • A HMRC enquiry into any business accounts, including those of sole traders, partnerships and limited companies.
  • A dispute with the HMRC where additional VAT is being pursued
  • A dispute with the HMRC where additional PAYE tax or National Insurance Contributions is being pursued
  • A dispute with HMRC relating to the tax status of employees or subcontractors.

To ensure seamless protection, the business fee protects enquiries into the tax returns of the directors, partners, and their spouse and company secretaries providing we prepare their tax returns. However, where the individual has self-employment income (outside of the main business) and/or gross rentals received as landlords that total £50,000 each or more per annum, then a separate Business Client fee is payable.

Some costs will not be protected under the Policy, including the following:

  • Outstanding taxes, penalties, interest or any other amounts due to HMRC
  • Defence of clients in criminal prosecution cases or serious fraud enquiries
  • Fees relating to pre-existing tax enquiries, or enquiries where tax returns were submitted to HMRC later than the statutory time limits (90 days).
  • Tax avoidance schemes

To subscribe to the Policy, a cheque for the amount due should be sent to us unless otherwise stated. If you need any more information, we can provide this by email or post.

PFP are specialist providers of Tax Enquiry Insurance. They pioneered fee protection in the UK for nearly 30 years. They have protected over 100,000 different businesses and individuals. Their fee protection scheme is backed by the worldwide AXA Insurance group. They are committed to working in conjunction with us, thus ensuring your interests are fully protected.