Anyone who sends in a tax return or business accounts to HM Revenue & Customs (HMRC) is at risk of a tax enquiry or inspection. Thousands of individuals and businesses are selected for such checks every year.
If it happens to you, the questions will be detailed and time-consuming to answer. Even if HMRC do not find any extra tax to pay, the costs to defend you could be substantial and can easily amount to hundreds or thousands of £s.
Most accountants’ normal annual fees do not cover the additional professional costs of handling tax enquiries and compliance checks. You can obtain protection against the potentially high costs of such fees simply and inexpensively by subscribing to our Tax Fee Protection (TFP) service.
What is it?
Our Tax Fee Protection Service protects against professional fees incurred defending clients during HM Revenue & Customs (HMRC) checks whether a client has paid the correct amount of tax or not.
The costs of defence in most reviews carried out by HMRC under the tax legislation are covered, including full and aspect tax enquiries, VAT and PAYE/NIC compliance checks, Business Records Reviews and more.
An additional benefit of subscribing to this service is that support is available on general legal issues and the complex areas of Employment Law and Health & Safety. You will be able to use this free of charge to obtain complementary expert advice on such issues when you need help.
What does it cover?
This service includes professional fees for defending clients in the following HM Revenue & Customs tax enquiries, compliance checks or inspections:
- Corporation Tax and Income Tax full or aspect enquiries
- PAYE/NIC compliance checks
- IR35/Employment Status/CIS enquiries and disputes
- VAT compliance checks
- Business record checks, inspections and interventions under HMRC’s Information & Inspection Powers at Schedule 36 FA 2008
- Inheritance tax / Probate return enquiries
- Stamp Duty and Stamp Duty Land Tax Enquiries
- National Minimum Wage / National Living Wage enquiries
- Child tax credit enquiries
- Student Loan enquiries
- Gift Aid enquiries
- Companies House confirmation statement enquiries
- Enquiries into Scottish taxes
The Summary of Service and Service Leaflet gives more detail about what is included within the service and can be downloaded via the link below.
A husband and wife partnership selling and installing double glazing was investigated by HMRC. At a meeting, HMRC alleged the husband had been dishonest. By the end of a long and detailed enquiry, HMRC repaid £129.00 of tax to the partnership and apologised, confirming that the allegation of dishonesty was a case of mistaken identity. Accountancy fees were approximately £5,000 and were paid in full by Vantage Fee Protect.
Business accounts for a wine shop were challenged by HMRC. HMRC claimed that expenditure of more than £150,000.00 on improvements to the shop front and interior was not allowable for tax purpose and that additional tax of £30,000.00 was due. Further detailed research into the relevant tax law and previous tax cases were necessary to dispute HMRC’s contentions. In the end, HMRC allowed the expenditure in full. Fees of £3,000 were paid in full by Vantage Fee Protect.
A property developer had a VAT Compliance Review. Following the review, HMRC challenged that because the client was making both exempt and VATable supplies, they should not have recovered 100% of input tax from previous years. The client’s accountant successfully disputed this on the basis that the client was below the partial exemption de minimis limit, avoiding a potential VAT liability of more than £20,000. Accountancy fees of £3,700 were incurred and were paid in full by Vantage Fee Protect.