Tax Investigation Service / Fee Protection Insurance
Our Tax Investigation Service gives you peace of mind that you will be able to cover additional accountancy fees resulting from an HMRC enquiry.
Tasked with reducing a £34 billion tax gap, HMRC have invested in sophisticated technology to recover tax underpaid by businesses and individuals. Making Tax Digital and the requirement to have a digital tax account also enables HMRC to access financial information more readily. As the efforts to recover lost revenue have increased, so too has the risk of an investigation. Even if you have nothing to hide – and no additional tax is found to be owed – an enquiry can generate significant costs in professional fees from your accountants and legal advisors.
Why you might be subject to a tax investigation
HMRC are investing an extra £800 million on compliance activity to increase revenue from tax compliance. £300 million of this has been set aside specifically to target SMEs and wealthy individuals.
There are a number of reasons why HMRC might decide to look more closely into your affairs:
- The Mortgage Verification Scheme enables mortgage lenders to check an applicant’s financial details with HMRC. Differences in the income declared on the mortgage application and the information held by HMRC could trigger a tax enquiry.
- Card payment processors who handle credit and debit card transactions have to provide HMRC with reports of sales made. HMRC checks this information against the turnover declared by retail businesses, to verify income from cards, and to gauge how much cash is being declared.
- Each year, over 80,000 reports are made to HMRC’s tax evasion hotline. Beware the wrath of a jilted spouse, disgruntled former employee or jealous business competitor!
- Over £1 billion has been collected so far from targeted campaigns. They have focused on doctors, plumbers, electricians, landlords and online traders. Smaller businesses such as painters and decorators, driving instructors, taxi drivers and pharmacists have also been subject to benchmarking.
- HMRC selects a proportion of enquiries at random every year. An enquiry into your business could simply be the result of an unlucky click of the mouse.
A small price to pay for peace of mind
The cost of Fee Protection Insurance is a fraction of the likely costs incurred during an enquiry. The average HMRC enquiry lasts 19 months and the professional fees to defend an enquiry often exceed £5,000*.
Key features of our Tax Investigation Service:
- Full representation to HMRC on your behalf. This includes handling all correspondence and interaction, and attending any one-to-one meetings
- Cover for up to £100,000 of professional fees with no excess*
- Peace of mind that we will fiercely defend any enquiry into you or your business without worrying about the cost.
Free business legal helpline
Our Tax Investigation Service also gives you unlimited access to a FREE business legal helpline, 24 hours, 365 days a year. This is particularly helpful to small businesses that may not have the internal resources to respond to a business legal need or issue.
The team of barristers, solicitors and legal experts can offer advice on all employment, health & safety and business legal matters including:
- debtor issues
- disciplinary matters
- contractual disputes
- small claims court procedures
- dealing with complaint letters (asserting rights)
- dealing with statutory demands
- property disputes.
* The Tax Investigation Service is backed by an insurance policy that provides cover for up to £100,000 of accountancy fees incurred over the course of an HMRC enquiry. You would still be liable for any additional tax that is found to be owed.