Tax Investigations

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I’ve done nothing wrong, why should I worry about a tax enquiry?

Most tax enquiries are generated by computer “risk profiling” and many are selected completely at random.  As a result, HMRC sometimes picks the wrong targets. Even if you have done nothing wrong, the taxman will not give up and will still try hard to find errors.

 

Can anyone’s tax affairs be scrutinised by HM Revenue & Customs?

Anyone who submits a tax return can come under scrutiny. Every year, HMRC start enquiries into many thousands of personal and business tax returns and accounts. VAT and PAYE payments are also thoroughly checked. The aim in every case is to collect more tax. HMRC has raised an extra £9 billion over the last three years and in 2012/13 the number of tax investigations increased from 119,000 to over 237,000 – in just one year.

 

I need to reduce my spending in the current economic climate

Not paying the annual cost could be a false economy. The potentially high costs of defending you in an enquiry would be much less affordable than the small annual charge. One thing is certain – HMRC does not stop making enquiries into tax returns when there is an economic downturn. The amount of debt the government is in at present is only likely to increase the potential threat of an investigation!

 

I don’t think I need protection

Like any other protection to meet an unexpected cost, everyone hopes that they don’t need it but when a costly enquiry starts, clients are glad that they’ve paid the small annual charge.

 

I’ve already got some protection through a trade subscription or policy. e.g. FSB

Such cover will normally be limited and not as wide ranging as this policy. Other policies may not pay our fees to look after you and may instead bring in an outside consultant who doesn’t know you.

 

How much could a tax enquiry cost me in professional fees?

The questions asked by HMRC are usually very detailed and time-consuming to answer. The costs of defending you can easily run into thousands of pounds, even if little or no extra tax is paid at the end of the enquiry. These costs are not protected by the normal annual fees paid to us.

 

Is there anything I can do for peace of mind?

You can take out the tax investigation policy which will protect you for the work and costs of defending you in the event of a tax enquiry by HMRC.

 

What is a Fee Protection Policy?

It is a Policy set up via us in conjunction with Professional Fee Protection (PFP) to protect clients who suffer a tax enquiry. For a small annual fee, you can purchase a fee protection Policy and obtain the benefits described on the Policy Summary.  When you take out the Policy you are able to make a claim against your insurance policy held with PFP in respect of our fees incurred.

 

What are the main benefits to subscribing clients of this Service?

• We will defend you, if and when you are selected for a tax enquiry by HMRC.

• The potentially high costs of professional fees for that defence will be claimed under the practices’ insurance policy.

• It will not be necessary to accept unreasonable tax charges by HMRC due to concerns about professional fees.

• You will also get free access to a 24/7 business legal helpline

 

What are the main benefits to the policy?

• We will defend you, if and when you are selected for a tax enquiry by HMRC.

• The potentially high costs of professional fees for that defence will be claimed under the insurance policy.

• It will not be necessary to accept unreasonable tax charges by HMRC due to concerns about professional fees.

• You will also get free access to a 24/7 business legal helpline

 

What is protected by the business fee?

To ensure seamless protection, the business premium protects enquiries into the tax returns of the directors, partners, and their spouse and company secretaries providing we prepare their tax returns. However, where the individual has self-employment income (outside of the main business) and/or gross rentals received as landlords that total £50,000 each or more per annum, then a separate business client premium is payable.

 

What is not protected by the policy?

Some costs will not be protected under the policy, including the following:

• Outstanding taxes, penalties, interest or any other amounts due to HMRC

• Defence of clients in criminal prosecution cases or serious fraud enquiries

• Fees relating to pre-existing tax enquiries, or enquiries where tax returns were submitted to HMRC later than the statutory time limits (90 days).

• Tax avoidance schemes

 

Who are Professional Fee Protection (PFP)?

PFP are specialist providers of Tax Enquiry Insurance. They pioneered fee protection in the UK 30 years ago. They have protected over 100,000 different businesses and individuals. Their fee protection scheme is backed by the worldwide AXA Insurance group. They are committed to working in conjunction with us, thus ensuring your interests are fully protected.

 

Take out a policy today - It costs much less than a investigation

www.monahans.co.uk

Monahans has offices in Bath, Swindon, Chippenham, Frome, Trowbridge and Glastonbury.

All information provided in this website has been prepared for general information and illustration purposes and does not establish, in any form, a business or professional services relationship with the author, Monahans itself, or trading companies of Monahans.

Although we have taken due care in the preparation of all information contained in this web site, any reliance on the information is solely at the user’s risk. You should always take professional advice in relation to your circumstances. Monahans accepts no responsibility for any loss (whether personal or business) resulting from reliance on any information contained in this web site.

Website by Professional Fee Protection. For Further information please see www.pfpaccountants.co.uk

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Professional Fee Protection Limited is authorised and regulated by the Financial Conduct Authority. Professional Fee Protection Limited is a company registered in England and Wales. Company registration number 1971993. Registered Office: PFP House, 5 Sylvan Court, Basildon, Essex, SS15 6TH. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk.

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