Fees Protection Insurance
H M REVENUE & CUSTOMS
INVESTIGATIONS INTO THE AFFAIRS OF CLIENTS
Self Assessment enables HMRC to enquire into the Accounts, savings and lifestyle of anyone without giving any reason whatsoever. The Inland Revenue now plan to make many more challenges in the coming year – a threefold increase over previous targets.
Whilst most challenges will be mounted for specific reasons, others will be made on a random basis − everyone is now at risk.
All this may require us to spend additional and considerable amount of time acting on your behalf.
A typical Revenue Enquiry may cost between £1,500 and £5,000 and for a larger business considerably more.
We as a Practice have arranged insurance which will enable us, in most cases, to represent you free of charge should you be one of the unfortunate!
To enable us to represent you in the above circumstances you are asked to pay a supplementary fee. We have been able to negotiate special and highly competitive rates for our Practice to meet the needs of our clients.
Expenses Covered
The service enables us to represent each client for professional fees (including specialist external support if necessary) to a limit of £10,000 per claim in respect of each of the following categories:-
- a) HMRC In-depth Tax Investigation
- b) PAYE Compliance Review Disputes
- c) PAYE Audit Inspection Disputes
- d) HMRC VAT Disputes
- e) Becomes Department for Work and Pensions Investigation
- f) Aspect Inquiries (to a limit of £2,000 per claim)
Please note that our fees for attending any standard control visits by any of the above agencies are not covered by this fee. The expenses covered are only those incurred if there is any dispute arising between the agency and yourself.
The insurance we hold uniquely does not include an 'Honesty Clause' so that payment of our claim does not depend on the outcome of the investigation and is not affected by errors and omissions identified by the Inland Revenue, late submission of accounts or by the level of penalties imposed following the investigation.
Liability of Clients
The service DOES NOT protect clients for any payment of tax, interest or penalties arising from the investigation. What it does do, however, is give us the best chance to fight the investigation as effectively as possible. In the event we receive notification of an investigation or dispute we shall at our discretion prepare a response to, or negotiate with, the relevant authorities under the general consultancy terms of our standard Letter of Engagement, which you will have signed.
Whilst our fee costs remain your responsibility, providing we have been paid for the Professional Fee Protection Service we will forward an appropriate claim to our insurers and credit the proceeds against your invoice, thus you will only remain liable for costs which, in their absolute discretion, the insurers refuse to cover and for any excess over the £12,000 limit.
We have hardly ever experienced an investigation which cost more than £12,000 to complete and claims will only be refused or reduced in exceptional circumstances. This might include for example excessive costs incurred where you insist on a meeting to review every letter written in the course of an investigation, or in the case of a new client of our Practice coming on to the scheme who has committed a 'time offence' such as late notification of a new source of income.
Obtaining Our Service
The facility is provided as soon as you have paid the relevant fee for the service. In the majority of cases we will bill the Fee Protection Service at the same time as we bill for your annual accounts or tax return (i.e. before the accounts are submitted to and examined by the Inland Revenue).