Tax Enquiries – Everyone is at risk
Anyone who sends in a tax return or business accounts to HM Revenue & Customs (HMRC) is at risk of a tax enquiry or inspection. Thousands of individuals and businesses are selected for such checks every year.
If it happens to you, the questions may be detailed and time consuming to answer. Even if HMRC does not find any extra tax to pay, the costs to defend you could be substantial and can easily amount to hundreds or thousands of £'s.
Most accountant’s normal annual fees do not cover the additional professional costs of handling tax enquiries and compliance checks. However you can obtain protection against the potentially high costs of such fees simply and inexpensively by subscribing to our Tax Fee Protection (TFP) service.
You'll also have the added reassurance that should HMRC open an enquiry into your tax affairs then we'll handle this matter on your behalf.
WHAT IS TAX FEE PROTECTION SERVICE?
Tax Fee Protection Service protects against professional fees incurred defending clients when HM Revenue & Customs (HMRC) checks whether a client has paid the correct amount of tax.
The costs of defence in most reviews carried out by HMRC under the tax legislation are covered, including full and aspect tax enquiries, VAT and PAYE/NIC compliance checks, Business Records Reviews, and more. If you read ”What does the tax protection service cover” below you'll see more details of what types of HMRC enquiry are covered.
An additional benefit of subscribing to this service is that support is available on general legal issues and the complex areas of Employment Law and Health & Safety. You will be able to use this free of charge to obtain complementary expert advice on such issues when you need help.
The Summary of Service gives more detail of what is included within the service and this can be downloaded via the link here.
Our insurance is underwritten by Qdos Broker & Underwriting Services Limited. Qdos is an insurance intermediary that specialises in the provision of specialist insurance schemes and is authorised and regulated by the Financial Conduct Authority. For further information about Qdos see here.
WHAT DOES TAX PROTECTION SERVICE COVER?
This service includes our professional fees for defending clients in HM Revenue & Customs tax enquiries, compliance checks or inspections in the following circumstances:
Examples of a claims made
Double glazing partnership
A husband and wife partnership selling and installing double glazing were investigated by HMRC. At a meeting, HMRC alleged the husband had been dishonest. At the end of a long and detailed enquiry, HMRC repaid £129 of tax to the partnership and apologised, confirming that the allegation of dishonesty was a case of mistaken identity. Accountancy fees amounted to approximately £5,000 and were paid in full by Qdos Vantage.
Wine shop
Business accounts for a wine shop were challenged by HMRC. They claimed that expenditure of more than £150,000 on improvements to the shop front and interior were not allowable for tax purposes and that additional tax of £30,000 was due. Further detailed research into the relevant tax law and previous tax cases was necessary to dispute HMRC’s contentions. In the end, HMRC allowed the expenditure in full. Fees of £3,000 were paid in full by Qdos Vantage.
Property developer
A property developer had a VAT Compliance Review. Following the review, HMRC contended that because the client was making both exempt and VATable supplies, they should not have recovered 100% of input tax from previous years. This was successfully disputed on the basis that the client was below the partial exemption de minimis limit. As a result a potential VAT liability of more than £20,000 was eliminated. Accountancy fees of £3,700 were incurred and were paid in full by Qdos Vantage.
WHAT IS THE COST OF TAX PROTECTION SERVICE?
We've set out below the annual cost of signing up to our tax protection service:
Category | Price (excluding VAT) |
|---|---|
Personal tax (non-crypto-currency transactions) | £100 |
Personal tax (including crypto-currency transactions) | £200 |
Sole trader | £125 |
Partnership (including personal tax returns where prepared by us) | £150 |
Limited companies (including personal tax returns of directors, spouses, civil partners where prepared by us) | £225 |
HOW DO I SIGN UP FOR THIS?
When purchasing a product from our insurance provider, you will be first asked to register for an account. Just click here to go to the registration page.
Once you have registered you will be able to log in to your account and complete the on-line application form. Once you have applied for the relevant insurance and made the payment, you will be able to log into your account to view your policy documents or product information.