Fee Protection Insurance
Protection from HMRC investigation – the risk to you is very real.
At Telic it is our aim to protect you and to offer the best possible advice. With our fee protection insurance package we can ensure that you have done everything possible to protect your valuable assets.
The truth is that even if you’ve done nothing wrong, anyone can be selected. No business is too small or too large for HMRC to challenge. If that does mean you, then we’d like you to be fully informed and armed.
Is fee protection insurance really worth it?
If we take a big picture view, it’ll show the importance of fee protection insurance:
- A total of £36.9 billion in additional tax has been generated by compliance activity in 2019/20. The UK tax gap in tax year 2018/19 is estimated to be 4.7% (£31 billion), which means that HMRC secured 95.3% of all tax due. The tax gap has fallen from 7.5% in 2005/06, showing a long-term downward trend.
- The tax yield from compliance activities related to individuals was £2.8 billion in 2019/20. Small and mid-sized businesses accounted for £12.6 billion.
- HMRC saw a £2.2 billion compliance yield from wealthy individuals in the last tax year – spending only £190 million compliance activity to recover it.
- Despite much press coverage which suggests otherwise, the largest businesses in the UK produced a return on investment in compliance of £714 for each £1 spent – an additional £15.8 billion in total.
It’s fair to say that HMRC enquiries are better targeted and are being undertaken with an unprecedented level of detail and persistence. In 2019/20, the total tax revenue increased by £8.8bn to £636.7bn with compliance activity yielding £36.9bn – a 8.2% increase in additional tax on 2018/19.
The cost of defending yourself professionally is potentially huge; enquiries are taking longer and the defence costs are increasing. Even when the outcome of the enquiry results in no adjustments to your tax position, the cost of the defence can be just as costly.
Following a property sale, HMRC opened an enquiry into an individual’s Capital Gains Tax position, requesting property valuations, leases and even challenging the transaction, as it involved a business part-owned by a member of the client’s family. The enquiry was relatively short, but entailed much detailed correspondence. HMRC accepted there was no additional tax to pay, yet the fees were still £3,500.
An HNW individual was subject to an enquiry by HMRC where HMRC sought to check the individual’s domicile status. HMRC requested a great deal of information over a period of four years. The accountant assisted the individual throughout the enquiry and after four years, agreement was reached with HMRC to settle the enquiries. The cost of the enquiry was over £75,000.
How we can protect you
No-one can prevent an investigation from HMRC, but our tax investigations package will:
- remove your concerns about the rising costs of enquiries
- ensure you receive the best defence to protect your tax position
- enable us to challenge HMRC’s assertions and assumptions head on, and that the basis of any enquiry is correct and that your case is handled fairly
- ensure the tax inspector is only asking for relevant information and documents, and provide all supporting information from our files that relates to your accounts
- handle all communications with HMRC, including letters, phone calls or notices issued
- prepare for and attend any face-to-face meetings with the tax inspector
- argue any complex or technical tax cases that are raised during the enquiry
Whether it’s a personal tax return, PAYE or VAT visit, a technical challenge or a detailed books and records enquiry, Telic’s tax investigations service is designed to support you to get a fair result.
If you have any questions or need further advice in this area, please get in touch and we will be happy to discuss further.