Tax Enquiry Fee Protection Service
For many years, HM Revenue & Customs (HMRC) has put resources into pursuing more tax. As a result, clients face an increased risk of an enquiry into their tax affairs. In addtion, HMRC now has wider powers to visit premises and inspect financial records. It is expected that HMRC will use these powers frequently, that enquiries will become more complex and that the cost of responding will increase. So, it is important as it has ever been for clients to obtain protection against these costs.
What powers do the HMRC have?
As of April 2009 HMRC are able to visit business premises to inspect records covering all taxes including corporate, income, PAYE, NI, Capital Gains and VAT. They can also issue written queries before you have even submitted your annual tax returns.
If you are selected for a tax enquiry, we will aim to settle it quickly and minimise the final tax liabilities. Even so, answering all of HMRC's questions takes time and the enquiry could drag on for months. It can cost thousands of pounds to defend you, whatever the end result.
Can anyone's tax affairs be scrutinised by HMRC?
Anyone that pays tax can be under scrutiny. Every year, HMRC starts enquiriries into 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.
I've done nothing wrong, why should I worry about a tax enquiry?
Most 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.
How much could a tax enquiry cost me in professional fees?
The question asked by HMRC are usually very detailed and time-consuming to answer. The cost 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 covered by the normal annual fees paid.
Is there anything I can do for peace of mind?
You can subscribe to the Fee Protection Service which will cover you for work and costs of defending you in the event of a tax enquiry by HMRC.
What is the Fee Protection Service?
It is a service set up by Johnson Cooke Associates to protect clients from HMRC queries. For a small fee, clients can subscribe to the service and obtain benefits described below. The service is backed up by an insurance policy that the practice has arranged. Under the policy, the practice can claim professional costs incurred defending clients in the event of a tax enquiry.
What are the main benefits to subscribing clients of this Service?
- Johnson Cooke Associates will defend you should you receive any correspondence or visit from HMRC
- The potentially high costs of professional fees for that defence will be claimed under the practice's insurance policy
- It will not be necessary to accept unreasonable tax charges by HMRC due to concerns about professional fees
What is covered by the Service?
You will be fully protected by the Service and the practice will claim under an insurance policy which provides cover up to £75,000 of professional costs in the following circumstances:
- Dealing with any correspondence from HMRC
- Attending at any meeting with HMRC
- Appeal to the First-tier Tribunal or Upper Tribunal
What is not covered by the Service?
Some cost will not be covered under the Serice, including the following:
- Routine compliance work, e.g. preparing your tax return
- Overseeing HMRC whilst they review your records
- Outstanding taxes, penalties, interest or any other amount due to HMRC
- Defence of criminal prosecution cases or serious fraud enquiries
- Fees relating to pre-existing tax enquiries
Johnson Cooke Associates provide details separatly of the annual Service Charges that are payable by different categories of clients.
To provide peace of mind, we introduced a NEW Tax Enquiry Protection Service of 2011. The service is backed by an insurance policy under which we can claim the cost of defending clients in tax enquiries. Clients who subscribe to the Service will also be able to obtain helpful advice about the complex areas of Health & Safey and Employment Law.
We strongly recommend that all clients take advantage of the service. Please note that the cost of tax enquiries are not included in our normal annual fees. Clients who do not pay for the service will be charged the full amount of any such cost according to our current hourly fee structure.
We offer this insurance to all our Clients and we believe this new service represents excellent value for money from little more than £1 per week. If you need more information, please call us and ask about the annual service charges that are payable be different categories of clients.