Tax Investigation Insurance

[TechR]

Hi

How important is it to gave Tax Investigation Insurance?
Where would be the best place to get it?
Would something like this be offered by banks?
What are the pitfalls I should look out for?

Thanks

 

[KAC]

Do you have an accountant?
Are you worried that you are avoiding/evading tax or are you happy that your tax returns are complete to the best of your knowledge and belief?

 

[TechR]

I have an accountant
I am happy that my tax returns are complete to the best of your knowledge and belief

But I was looking at FSB and they had it as a benefit, and I looked into Tax Investigation Insurance.
And on some forums I read that HMRC select accounts randomly, and ask for meetings and info from the accountants. This can cost the person thousands in accountant costs, to do this work for HMRC.

 

[KAC]

I would go for FSB.as a fail safe.
Unless you are in a risk category - and your accountant should be able to tell you if you are - you've about as much chance of being selected and it costing thousands as you have of winning a big prize in the lottery

 

[g]

1 How important is it to gave Tax Investigation Insurance?
2 Where would be the best place to get it?
3 Would something like this be offered by banks?
4 What are the pitfalls I should look out for?

1 Relatively inexpensive, it's wise to have.
2 A Google-search will show various sources.
3 Maybe. And if so, it's likely a better deal can be had elsewhere.
4 Nature and level of cover.

 

[Ally Maxwell]

QDOS

 

[MyAccountantOnline]

Hi

How important is it to gave Tax Investigation Insurance?
Where would be the best place to get it?
Would something like this be offered by banks?
What are the pitfalls I should look out for?

Thanks

It's a risk you can choose to insure against. I actually cant remember the last time any of my firms clients were subject to an HMRC Enquiry but that doesn't mean you wont be subject to one.

I'd ask your accountant if they offer any policies, some do.

Also make sure you know who the insurance will pay to handle the Enquiry - will they pay your accountants fees or insist you use their 'consultants'.

I haven't seen any fee protection insurance offered by banks most clients who take this insurance I act for tend to use PFP.

 

[Deleted member 59730]

Having been "done over" many years ago I would say that my accountant did nothing to help so there were no costs there. It was my time and trips to the tax office which were the big nuisance. I would put £100 into a piggy bank every year instead.

At the end of the nightmare I had a very good idea why I was picked up. A friendly neighbour worked in my tax office and had passed my file to another inspector as he should have done under the rules.

 

[KAC]

It's a risk you can choose to insure against. I actually cant remember the last time any of my firms clients were subject to an HMRC Enquiry but that doesn't mean you wont be subject to one.

Totally agree with you.
I had a reasonably large small practice if that makes sense with which I was involved for >40 years. We had the odd aspect enquiry which we were normally able to settle without too much aggro and minimal fees. We had one COP9 investigation which we contracted out to a medium sized firm and that did cost the client some real money both in fees and tax. Apart from that, I guess we had well under 1 enquiry per year so you just have to assess your personal risk

 

[SteveHa]

Three of my clients have had enquiries in the past twelve months. One is ongoing, but frankly, he deserves it.

The other two were dealt with in a single letter and no real extra cost.

As has been alluded to, you need to assess your exposure and the likely depth available to HMRC.

 

[Glenn Martin]

I have a practice wide policy so all clients get the benefit of it, as in last 3 years not had a single inquiry to deal with.

I keep on with it as the clients like the access they get to the HR, Legal and HSE helplines that are available through it. I was thinking of maybe self insuring next year.