Protecting Against The Costs Of A Tax Enquiry  

The introduction of self assessment gave HM Revenue and Customs (HMRC) greater rights to enquire into your tax affairs. No reason for an enquiry has to be given and many are completely random, irrespective of whether there is any reason for suspicion. 

In the past few years, we, along with other firms of accountants, have seen an increase in the number of enquiries conducted by HMRC as more resources are invested in a “spend to save” initiative. 

Not only can enquiries be stressful and time consuming, they can also be expensive as we have to spend time explaining figures to the Inspector of Taxes, as well as providing information and evidence to support entries on your tax return. Often, the fees involved in dealing with an enquiry will outweigh both the additional tax, if any, arising from the enquiry and your usual annual fees for preparing your return. 

Within the accountancy profession, there has been a move towards offering protection against the unexpected professional fees incurred in the event of an enquiry. Having considered guidance from our governing body, we have decided that it is right to be offering such protection to our clients.

In association with CCH Tax Safe, we are able to provide cover on an annual basis from 1 April 2008. In general terms, this will cover up to £75,000 of fees in the event of an enquiry, investigation or dispute, where HM Revenue and Customs enquire into the entirety of your tax return (full enquiry) or where only part of your tax return is questioned (aspect enquiry). Where you operate a business, the protection provided covers not only your business affairs but  also personal aspects of your tax return, as well as a dispute with HM Revenue and Customs in respect of VAT or PAYE.

Prices for the forthcoming year (or part thereof, for applicants after 1 April 2008) are as follows:

Limited company with protection for directors

Partnerships with protection for partners

Sole Traders

Individuals with no business interests

£264.38

£229.13

£188.00

£88.13