Tax Enquiries - Fee Protection Scheme

We are advising clients insure, as soon as possible, against the potential professional costs of defending themselves in the event of a tax or vat investigation.

The government announced earlier this year that they were investing over £900 million into HMRC over the next four years to investigate and clamp down on businesses and individuals who underpay their due taxes.  The suggestion is that investigations will increase by over 3,000% as the spearhead strategy in HMRC’s new campaign, and that they will become far tougher on assessing and collecting revenues and issuing increasingly severe penalties.

Already, we've noticed a much more aggressive and intolerant attitude coming through from HMRC.  So much so that we, as a firm, have become concerned that this uncompromising approach from HMRC may result in many perfectly innocent victims being caught up in their ‘investigation net’ as a matter of routine.  And, once caught up, the cost of responding to their enquiries can become a very time consuming and expensive exercise.

We believe that fee protection insurance makes good sense at this time as the best way to protect yourself from these unwelcome costs should you be selected for investigation.

We have therefore, after lengthy negotiations to get the most comprehensive deal at the best price, re-introduced a ‘fee protection service’ through this firm.  Cover is now available for all clients through Premier Protection, part of Croner, a company of sound international reputation for their provision of business advice and support.

The current rates we've agreed for the Fee Protection service for 2011/2012 are set out below.

business entity type	under £75,000 turnover	£75,001 to £500,000 turnover	over £500,000 turnover
private tax clients	49.00	-	-
sole traders	139.00	159.00	199.00
partnerships	169.00	199.00	259.00
limited companies	169.00	199.00	259.00
* VAT is required to be added at current rates

Some businesses will belong to business organisations that provide this type of insurance as part of the subscription – our advice, please read their small print very carefully.  Cover included within such ‘membership packages’ is usually just at the basic level, and is probably inadequate in the current ‘investigatory climate’, not covering, for example, ‘aspect’ enquiries (which is the main route used by HMRC in starting most investigations).

We are therefore advising all clients to think seriously about insuring themselves comprehensively, which you can do by calling our office.

And, in common with any insurance, cover needs to be in place before the Revenue’s first letter to you lands on your doormat.  So please, for your own peace of mind, protect yourself as soon as you can.  Give us a call now to arrange cover.