TAX INVESTIGATION SERVICE
When you subscribe to our service we are able to make a claim against our insurance policy held with Professional Fee Protection in respect of our fees incurred (up to £100,000 per claim unless otherwise indicated) when we defend a client who is subject to any of the following events:
An Aspect Enquiry – This is where HMRC enquires into one or more aspects of the self assessment tax return, which may involve clarification of particular entries to detailed consideration of whether those entries have been treated correctly for tax purposes. It may involve a check on the records upon which the particular entries were based. It will also feature the issue of a notice under S9A/S12AC TMA 1970 or paragraph 24(1) Schedule 18 FA 1998.
A Business Inspection Notice – This is where HMRC exercise their power to request entry to a person’s business premises and inspect the business premises, assets, goods and documents. It will feature the approval of an “Authorised Officer” of Revenue & Customs and the issue of an Inspection Notice for a short notice or unannounced visit or where the proposed inspection has been approved by the First-tier Tribunal. The notice will be issued under Schedule 36 paragraph 12(2) FA 2008.
VAT/PAYE/CIS Compliance Visit – This is where HMRC wish to carry out a routine PAYE/VAT/CIS Compliance Visit where it is considered that professional representation is necessary and the matter cannot be dealt with by the client alone. The limit of indemnity for this is £2,000.
Code of Practice 8 Investigations – This is where HMRC Specialist Investigations conduct an investigation in accordance with Code of Practice 8. The limit of indemnity for this is £5,000.
IR35 Status Check – This is where HMRC write asking if it has been considered whether the client falls within the scope of IR35. The limit of indemnity for this is £2,000 per claim.
VAT Disputes – This is a challenge by HMRC to the accuracy or completeness of returns submitted. It will feature a disagreement over both the way in which VAT has been operated and over the amount of VAT due.
PAYE/NIC/CIS Disputes – This is a challenge by HMRC to the accuracy or completeness of returns submitted in accordance with Pay As You Earn/CIS Regulations. It will feature a disagreement over both the way in which PAYE/CIS has been operated and over the amount of PAYE/NIC due.
Employment Status Dispute – Where HMRC state that an individual previously classed as self-employed should have been subject to PAYE.
IHT Cover – This relates to an estate or trust where our involvement is considered necessary following the submission of an IHT return which has been wholly prepared by us. The limit of indemnity for this is £5,000.
Gift Aid Inspections – Where a registered charity operating a Gift Aid Scheme with HMRC is being reviewed. The limit of indemnity for this is £2,000.
Partners/Directors Cover – Where a partnership or limited company join we may also make a claim in the event of either an aspect or full enquiry into the personal returns of the partners and directors and their spouses and company secretaries (where we prepare the tax return). This automatic cover will not extend to rental income in excess of £50,000 per annum (before expenses) or any other business activities. We must also be the tax return agent at the time the enquiry commences. Application for a Judicial Review – This is an application (during the course of a valid claim under the Policy) to the Administrative Court to challenge a decision of an official where no other legal recourse is available to the applicant. The limit of indemnity for this is £5,000.
IR35 Disputes – This is where HMRC states a client should be subject to the IR35 legislation following a PAYE Compliance Visit or the issue of a notice under paragraph 24(1) Schedule 18 FA 1998. It will feature a disagreement over whether this legislation applies.
Read more about our Tax Investigation Subscription in this document for extended information.
Added Value for Subscribers:
Client Legal Helpline
Unannounced HMRC visits “out of hours” helpline now included.
HMRC have the powers to make unannounced visits to any business. Sometimes these visits can be late at night. Clients who subscribe to our Tax Investigation Service will be provided With access to a free helpline to provide you with expert advice on how to deal with this situation “there and then” should you receive an unannounced visit from HMRC.
When faced with this very real threal it is important you have the support and advice of an expert when you need it most. Our “out of hours” helpline will dc this for you. It is not uncommon for HMRC to visit a business at 11.00 pm. Should this happen to you it is great know that will have the peace of mind of instant access to an expert to advise you accordingly.
We recommend all our clients consider joining our Tax Investigation Service. Every year, HMRC carries out enquiries into the tax affairs of an increasing number of individuals and businesses in the UK. Many people find an HMRC enquiry disruptive, intrusive, stressful, and ultimately expensive.
Joining our Tax Investigation Service, provides peace of mind knowing we are here to help you when HMRC come calling.
With a budget deficit of over £355 billion, we fully expect HMRC to raise more enquiries this year to increase tax revenue and plug the hole left in the Government’s finances by the economic damage caused by COVID-19.
Not only does our service pay our professional fees in the event of a check on your tax affairs, it enables us to provide expert advice and guidance to you every step of the way.
You could be at risk of an enquiry
There does not need to be a reason for HMRC to check your tax affairs. Every taxpayer who submits a tax return is at risk of being targeted. Many thousands of enquiries are launched each year resulting in no extra tax being charged yet accountancy fees still need to be paid.
Even if you have done nothing wrong, many tax enquiries are conducted at random. HMRC have recovered £4bn in taxes in the last quarter, nearly double the previous year amid an increase in investigations.
Saving you money and stress
Our service will pay our professional fees that result from most types of HMRC enquiries or full investigation (full details are listed on the Service Summary).
We have taken out an insurance policy in our own name that is backed by Professional Fee Protection (PFP), one of the UK’s leading providers. Our policy enables us to provide you with expert advice and peace of mind knowing we will work on your case to resolve the situation up to our service limits.
A storm is brewing, protect yourself with our Tax Investigation Service.
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 histories. Tax and VAT repayments will also be checked more rigorously alongside the usual full tax investigations.
HMRC estimate as many as 10% of claims are fraudulent and even more, will have made errors. Naturally, this will result in many furlough claims being investigated by HMRC. Most of these claimants will not have abused the scheme in any way, however, some innocent errors will have been made. As always, it will not only be the fraudulent cases that are selected for review.
With an overall national debt of £2.21 trillion as of March 2021, there is also a concern that the number of general compliance checks being undertaken outside of the job retention scheme will also increase significantly. Again, this will inevitably result in innocent taxpayers facing potentially thousands of pounds in unexpected accountancy fees.
With this in mind, we strongly recommend that you subscribe, giving us the opportunity to support and protect you throughout the process of a tax investigation should you be a target of HMRC.
Many tax enquiries are conducted at random so you could find yourself at the centre of a tax enquiry at any time, even if you have done nothing wrong.
The professional fees associated with a tax enquiry can amount to thousands of pounds. These costs are additional to our normal annual fees.
We know and understand your business and personal financial affairs and want to provide you with the best possible defence saving you time and money.
HMRC opened 102,000 investigations into taxpayers in the first quarter of 2021 – up 36% from 75,000 in the previous quarter.
The main exclusions in our service are as follows:
- The costs of making good any deficiencies in books, records, accounts or returns or work ordinarily capable of being done by the client.
- Claims which originate from any matter which existed before the first period of insurance except where full disclosure has been made and the increase in risk has been accepted in writing.
- Minimum Wage, Student Loan and Tax Credit Enquiries.
- CIS Gross Payment Status Disputes.
- Returns which have been submitted more than 90 days late.
- Any claim involving the Civil Investigation of Fraud procedure (Code of Practice 9) or Specialist Investigations except where a Code of Practice 8 booklet has been issued.
Full details available on request. If you wish to download this information, please refer to this document.