Tax Investigation Service
No matter how large or small you are HMRC can launch a tax investigation at any time. There doesn’t have to have a specific reason – everyone who submits a tax return is at risk. It’s impossible to tell when an investigation might happen and that’s why it’s so important to protect yourself today.
Why leave yourself open?
HMRC tax investigations often run on for over a year, leading to increasing costs and a lot of stress for the business involved.
What’s more, the government has recently redoubled its efforts to pursue tax revenue, employing thousands of new compliance staff.
At a time when everyone is feeling the economic pinch – the risk of an inconvenient, expensive, time-consuming tax investigation is higher than ever.
Keeping your interests at heart
As your accountants, we care about your health and wellbeing. We know that many people never expect a HMRC tax investigation, and the impacts can be long-running and serious.
As well as our accountancy services, we’re here to help you – offering advice, guidance and a tax investigation service to protect your business.
What is a Tax Investigation?
Simply put it’s when HMRC make enquiries into your tax affairs. This can range from a phone call to a full blown investigation where they will go through the full books and records.
In recent years, we have seen an increase in the number of enquiries, both into individual tax returns and company returns. The tax authorities now have more powers than ever before to investigate UK businesses.
An enquiry or investigation into your tax affairs by HMRC can be disruptive, intrusive and expensive. It can also be a long and time-consuming process, in some cases lasting for a year or more, which in turn can lead to spiralling costs.
Why worry should I worry
- I haven't done anything wrong?
Just because you haven’t done anything wrong doesn’t mean that you can’t be picked on.
There doesn’t need to be a reason for HMRC to trigger an investigation. Every taxpayer who submits a tax return is at risk. No-one is immune.
Win or lose, you always have to pay the cost of handling the investigation, which is over and above our normal fees and the costs involved could be substantial.
Disruptive, intrusive and expensive; when HMRC investigate you or your business it can drag on for a year or more saddling you with spiraling costs and rocketing stress levels.
Tax Investigation Protection Is Available
Our Tax Investigation Service will cover our professional fees that result from most types of HMRC enquiry or investigation. Unlike some fee protection products that appoint their own advisors, our Service ensures that we can represent you throughout. We believe that we know your business best and we want to be there for you when you need us most.
Under the Tax Investigation Service, we can reclaim our costs in protecting you during a tax investigation and we will be able to defend you in the event HMRC check your books and records or visit you to check PAYE or VAT Returns. Protection starts from the very first request.
Our tax investigation service, which is backed by an insurance policy that we hold with Professional Fee Protection Limited (PfP®), will cover our professional fees that result from most types of HMRC enquiry or investigation (full details are listed in the ‘service summary’).
‘Peace of Mind’
For peace of mind, we recommend that every client should be protected in the event of a tax investigation and subscribe to our Tax Investigation Service as tax investigations are expensive and can last several months and even years.
We will be free to work on your case for as long as it takes to bring about a resolution, up to the policy limit.
For limited companies and partnerships, the tax investigation service provides inclusive cover for all relevant individuals. When a business signs up to the service, all its directors, partners and their spouses and company secretaries, will also receive representation during an investigation into their personal tax affairs, as well as those of their business.
To provide this service, we need to be acting as the tax returns agent for the individuals in question. A personal subscription is, however, required for each individual where gross rental exceeds £50,000 per year, or for any other business activities.
View our Service Summary to see whats included under this service.
Client Legal Helpline
An additional benefit is that clients will have access to a business support helpline. A friendly team will be available to advise on common legal issues, such as:
- Advice from a dedicated team of legal consultants, barristers, solicitors and legal executives
- Unrestricted access to use the service
- You can call regarding any commercial legal problem:
- Legal contract matters
- Landlord and tenant or property queries
- Employment and health and safety matters
- A significant feature of this service is its immediacy
While the service is essentially provided by telephone, consultants will enter into correspondence with members where necessary. This could entail looking at any documents, which may be essential for the consultant to consider prior to giving advice, for example, contracts of employment, leases etc. Please note that the service does not extend to corresponding with third parties, only with the individual about their legal rights.
Employment & Personnel
Health & Safety
Reporting an accident
Dealing with hazardous substances
Commercial Legal Issues
Landlord and tenancy agreements
Copyright and patents
Frequently Asked Questions
I’ve done nothing wrong, why should I worry about a tax enquiry?
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.
Can anyone's tax affairs be scrutinised by HM Revenue & Customs?
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’s total yield from tax investigations jumped by a third to £21 billion in 2011-12.
I need to reduce my spending in the current economic climate
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!
I don’t think I need protection
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.
I’ve already got some protection through a trade subscription or policy. e.g. FSB
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.
How much could a tax enquiry cost me in professional fees?
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.
Is there anything I can do for peace of mind?
You can subscribe to our Tax Investigation Service which will protect you for the work and costs of defending you in the event of a tax enquiry by HMRC.
What is a Tax Investigation Service?
It is a Service 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 our Service and obtain the benefits described on the reverse of this sheet. The Service is backed by an insurance policy that the practice has arranged through Professional Fee Protection. When you subscribe to our service we are able to make a claim against our insurance policy held with PFP in respect of our fees incurred.
What are the main benefits to subscribing clients of this Service?
- 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
What is protected by the Service?
Under the Service, 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.
What is protected by the business fee?
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.
What is not protected by the Service?
Some costs will not be protected under the Service, 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
How do I join or obtain information?
To subscribe to the Service, 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.
Who are Professional Fee Protection (PFP)?
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.
Sign Up Today
Sign up to our Tax Investigation Service today to be protected from the costs of a Tax Investigation.
Please use the form below or give us a call to make contact with us and set up a free consultation.