Tax Investigation Service
Ensuring peace of mind in the event of an HMRC investigation
Why do I need this tax investigation service?
Every year, HMRC carry out enquiries or investigations into a significant number of individuals and businesses. They do not need a specific reason to start an enquiry or investigation into your tax affairs.
Last year, HMRC collected £34.1 billion through tax investigations and enquiries. What’s more, HMRC can target anyone who submits a tax return and their highly
efficient ‘Connect’ software is accessing and trawling through financial information right now.
83% of tax investigations are triggered by the ‘Connect’ system.
With a budget deficit of over £300 billion, and an investment of over £100m in a taxpayer protection taskforce of 1,265 HMRC staff, we fully expect HMRC to raise more enquiries to increase tax revenue to plug the hole left in the Government’s finances by the economic damage caused by Covid-19.
For those who have relied on a Covid-19 support scheme such
as the CJRS (furlough scheme), it is likely that HMRC will be looking a lot more closely at tax
returns, payments and compliance history. Tax and VAT repayments will also be checked more rigorously alongside the usual full tax investigations.
Remember, HMRC do not need a specific reason to target a business, it can be despite you having done nothing wrong.
We run a Tax Investigation Service to help protect our clients against the professional costs involved in a tax investigation or enquiry. This service is backed by an insurance policy we have taken out in our own name. We must stress that dealing with a tax investigation is not included in our standard fees and the costs involved can be substantial, this is why we strongly recommend that you subscribe to our Tax Investigation Service.
It has always been the case that HMRC need no specific reason to investigate your business.
However, with the budget deficit caused by COVID, HMRC have now increased their budgets and manpower for investigations and their 'connect' system trawls through all of our tax data looking for anything that could be used to spark an investigation.
You don't need to have done anything wrong, you can still be targeted.
Tax investigation costs can be very high and are not something accountants include in their 'regular' fees.
This Tax Investigation Service will help cover costs in the event your business is targeted by HMRC.
Frequently Asked Questions
What is a Tax Investigation Service?
It is a Service set up by us and is backed by an insurance
policy we have taken out in our own name with Professional
Fee Protection (PFP) and protects our clients who suffer a
tax enquiry. For a small annual fee, you can join our Service
and obtain the benefits described on the service Summary.
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.
I have done nothing wrong, why should I be worried about a tax enquiry?
Most tax enquiries are generated by computer ‘risk profiling’
and many are selected completely at random. As a result,
anyone can be picked for investigation, even if you have
done nothing wrong.
You prepare business tax and personal tax returns for us, what subscription do we need?
A business subscription will automatically provide personal
tax protection for the partners, directors, company secretary
and their spouses providing we also prepare their tax
returns. A sole trade supplement may be required where
you have additional self-employment income or gross rental
income in excess of £50,000 per year.
My company hasn’t yet filed its first corporation tax return with HMRC
If the company has employees and/or is VAT registered,
there are still advantages of joining the service before the
first corporation tax return is filed, for example, in the event
of a PAYE or VAT enquiry.
What happens if we have a new director/partner join our business part way through the year?
Providing the business has subscribed, and we are engaged
to prepare the personal tax return for the director/partner,
they will automatically be included within the service at no
I have only just engaged you as my accountant and you have not yet filed a return for me, should I wait to join?
Once you join the service, you will be protected against
additional fees relating to enquiries raised into previous
years, even if we did not prepare the return. Exclusions
to this would include any fees incurred by the previous
accountant and any fees relating to the reconstruction of
books and records that have been poorly maintained.
I don’t think I need protection.
Like any other protection to meet an unexpected cost, everyone hopes that they do not need it but when a costly enquiry starts, clients are glad that they have paid the small annual charge.
I have already got some protection through a trade subscription or policy e.g. FSB.
The cover offered by these types of protection is often not as wide ranging as the service we offer. Such policies are not likely to cover our fees for the additional work you require and may instead bring in an outside consultant who does not know you.
I might leave it for now and think about taking cover later in the year
Protection is only available from the date the subscription payment is received. If an enquiry letter is received from HMRC prior to receipt of payment, our fees will not be settled under the service.
If I have missed the filing deadline for my return, am I still covered?
Returns which have been submitted more than 90 days late will be excluded from the service.
Who are Professional Fee Protection (PFP)?
PFP are specialist providers of Tax Enquiry Insurance. They pioneered fee protection in the UK over 30 years ago. They have protected over 600,000 different businesses and individuals. They are committed to working in conjunction with us, thus ensuring your interests are fully protected.
If I buy today, when does the services start?
This cover starts from 1st August 2021 or from the date of purchase is after that date.
How do I join or obtain information?