Tax Investigation Insurance

Protection small businesses can rely on

Why is tax investigation insurance needed?

HMRC have begun an escalation of compliance activities, which are having a significant impact upon UK businesses and sole traders.

With the strain of rising costs in the UK, the looming recession and continued recovery post-COVID19, it is becoming increasingly crucial for businesses and sole traders to secure themselves against unanticipated expenses and additional financial burdens.

HMRC are carrying out more and more tax investigations, with a targeted approach and extraordinary precision; mainly on companies and sole traders who took advantage of the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme.

Regardless of innocence, businesses and sole traders may be subject to a detailed review of their tax obligations. It is a huge financial hazard not to be prepared for the surge in HMRC inspections.

What is covered within the policy?

With tax investigation insurance, you can keep costs low if HMRC decides to investigate.

This policy safeguards you from a variety of scenarios, allowing you to rest assured.

Corporation tax returns

If HMRC were to investigate your companies earnings, losses, loans and any other factors relevant to your tax liability.

Partnership tax returns

To protect you against HMRC investigating all declared income, losses of your partnerships.

Sole trader tax returns

Protecting sole traders against an investigation into your self-assessment business forms.

Personal tax returns

If HMRC chose to investigate your personal tax after inspecting your declaration of income.

VAT

Should HMRC investigation any products your business may sell.

Employer compliance

Protecting you against an investigation into company guidelines, non-disclosure requirements, business ethics and much more.

IR35

You business may endure investigations into off-payroll and on--payroll workers, to make sure they are being taxed fairly.

1

Contact us

Complete the form so we can understand more about you
2

Await your quote

Our team will be in touch with your quote for Tax Investigation Insurance
3

Protection begins

As soon as you pay the fee, your cover will begin

How we can protect you with Tax Investigation Insurance

While no one can prevent an investigation from happening, Tax Investigation Insurance will remove any concern you may have about dealing with a claim. Our insurance package enables us to:

  • Ensure you receive the best defence
  • Challenge HMRC’s assumptions
  • Handle all communication with HMRC
  • Ensure the tax inspector is only requesting relevant information
  • Prepare for and attend any face-to-face meetings with HMRC
  • Address any complex or technical tax questions

Frequently Asked Questions

Does the subscription for the Tax Investigation Insurance automatically renew the following year?

Yes; when you subscribe to the insurance, we will automatically take payment the following year until you advise us to cancel your subscription. However, you will always receive an email from us to let you know the renewal process is coming up. The protection will always begin from the date you subscribe, and lasts for 12-months; so you can easily monitor this payment on your bank statements.

What does the Tax Investigation Insurance cover?

Investing in Tax Investigation Insurance – whether you’re a limited company or a sole trader – will give you peace of mind that you’ll be protected and have the right help available, should you be selected for a random investigation by HMRC. Nobody can prevent an investigation, but Tax Investigation Insurance provides some protection for you, such as:

  1. Removing your concerns about the rising costs of enquiries
  2. Having the right support to argue any complex or technical tax cases, which could be raised during the enquiry
  3. Ensuring you receive the best defence to protect your position
  4. Enabling us to challenge HMRC’s assertions and assumptions head on – as well as ensuring the basis of any enquiry is correct and your case is handled fairly
  5. Giving you peace of mind the tax inspector is only asking for relevant information and documents, and providing all supporting information from our files which relates to your accounts

Why should I take out a Tax Investigation Insurance policy?

There are many different reasons you should look to take out a policy. Here are just some reasons to act now:

 

  1. Enquiries are taking more time to deal with and are becoming more expensive as a consequence. The cost of not defending any enquiries by HMRC properly is huge
  2. If you can’t afford defence, you could end up paying a much higher tax bill than required
  3. Tax investigations can happen to anyone – at any time; whether you’re an individual, or a business; however good your records – even at random
  4. HMRC have access to data from merchant acquirers, banks and building societies, property-based information, land registry, letting agents, mortgage applications, DVLA, foreign data from overseas tax authorities, the tax evasion hotline – and they continue to expand their data sources. Even if you have done nothing wrong, you can still be selected for an investigation
  5. HMRC are using their compliance resources to undertake targeted campaigns and cross-tax enquiries in an attempt to maximise the tax they can recover
  6. We can’t take away the stress and anxiety of being under investigation, but we can remove the cost and provide you with the right level of support you need

How many of my companies can I protect?

You can protect as many companies as you require.

Is this service offered internationally?

No; it is only a service provided in the United Kingdom.

How far back can HMRC go in a tax investigation?

HMRC will carefully inspect and look into any particular case based on its severity. If there are signs of wilful tax avoidance, an investigation could potentially extend as far back as two decades.

What can prompt a tax investigation?

HMRC will conduct a more thorough investigation if they believe errors have been made in regards to taxes, or any income has been purposely hidden. Tax investigations are more likely to happen if:

  • You are late in filing tax returns, you pay your tax late or you make errors which need correcting
  • There are inconsistencies between different tax returns, such as a large fall in income or increase in costs
  • Your costs are higher than normal for businesses in your industry
  • The tax returns are inconsistent with how busy your business actually is
  • You have offshore bank accounts
  • You gain income from property
  • You deal with businesses that routinely take cash payments, or in an industry that HMRC has decided to target
  • HMRC receives a tip-off

How will I know HMRC have begun a tax investigation?

Should HMRC decide to investigate your tax return, they will notify you. This typically comes in the form of a letter that specifies whether the investigation will cover a certain element or encompass a more comprehensive look. The specifics of what instigates such an inquiry is kept secret, but certain circumstances have been highlighted as potential factors:

  • It could be plainly obvious, such as an omission picked up by HMRC
  • It could be completely random
  • You could be in a HMRC target area. There are task forces set up by HMRC to target areas that are thought to be at high risk of tax fraud
  • You may have done something to attract the attention of HMRC. Some of the reasons in the previous list can make you high risk in the eyes of HMRC

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Whether you’re setting up your business, wanting to branch out abroad, reduce your taxes, grow your wealth or secure citizenship abroad for yourself and your family; RHJ Accountants are here to help you. Whatever it is, talk to us today about your move to Cyprus, Malta, Portugal, the UAE, UK or the USA.

Malta

Centris Business Gateway Level 2M, Triq Is-Salib Tal-Imriehel, Central Business District Zone 3, Birkirkara CBD3020

Lisbon, Portugal

+351 213303751
Av. da República, Nº 6 – 1st floor left, 1050-191

Porto, Portugal

+351 220280143
RHJA Accountants Lda, Sitio Work – Costa Cabral, Rua de Costa Cabral 2066, 4200-217

Dubai, UAE

+971 42239633
Office No 1310-A, Level 13, Aspin Commercial Tower, Sheikh Zayed Road

London, UK

+44 207 692 7006
80-83 Long Lane, London, EC1A 9ET

Sheffield, UK

+44 114 227 0070
The Quadrant, 99 Parkway Avenue, Sheffield, S9 4WG