28 September 2016
What are the benefits of tax enquiry insurance?
We’ve been offering tax enquiry insurance as an optional extra service to our clients for many years, partnering with Croner Taxwise from 2014 onwards.
So what is Tax Enquiry Insurance? Our tax enquiry insurance (provided by Croner Taxwise) covers the cost of our fees for handling a tax or VAT enquiry on behalf of you or your business. It does not cover any tax or VAT that may become due as a result of an HMRC enquiry. The cover is often referred to as Fee Protection Insurance which is perhaps a better description.
OK, so why do I need it? An HMRC enquiry can be both stressful and expensive. If HMRC open an enquiry into your personal or business affairs then it usually involves detailed correspondence to/from HMRC in relation to entries in your accounts and tax returns, and sometimes also a meeting with a tax or VAT inspector to settle any issues found. Taking out our tax enquiry insurance gives you the peace of mind that we will fight your corner with HMRC every step of the way, without having to charge you extra fees for the privilege.
We are currently assisting a KRW client with a full enquiry into their company accounts for two years, plus the Director’s personal tax returns have been looked into too. While the personal tax enquiry was dealt with swiftly, the company enquiry has already racked up fees of over £5,000 due to the detailed review being undertaken by HMRC and we still have some way to go before we will reach a conclusion. While this is perhaps an extreme example, even a straight forward enquiry will typically cost over £1,000 in extra fees.
Prices for cover range from £50+VAT for someone who just prepares a personal tax return, to £125+VAT for a limited company turning over up to £10 million per annum. The limited company policy also covers the personal tax returns for its Directors, providing they are also KRW clients.
While tax enquiry insurance is very much an optional extra for our clients, we believe it offers cost-effective peace of mind, should HMRC come knocking.
Introductory and renewal invitations will be coming out in the post shortly but for any further advice on fee protection insurance please contact Sandra Franklin.
- Tax enquiry insurance protects you against extra fees for handling an HMRC enquiry
- We can then fight your corner with HMRC without fear of racking up extra fees
- Fees for even a simple company enquiry usually exceed £1,000
- For a full scale enquiry fees can be over £5,000
- Premiums start at £50+VAT, with cover for most companies costing £125+VAT