Tax Fee Protection Insurance

The Insurance You Don't Know You Need Until It's Too Late…We Are Here To Change That

HMRC carries out thousands of tax enquiries into UK individuals and businesses every year. Whilst these are often triggered as a result of a particular red-flag, HMRC can and do regularly select taxpayers to enquire into using HMRC Connect, their "supercomputer". Whilst you may be comfortable that your tax affairs are accurate and up to date, if you are the subject of an HMRC enquiry you will be required to respond to it, even if you have done nothing wrong. The fees and costs in dealing with the enquiry are payable by you and cannot be reclaimed from HMRC. In this day and age it is therefore prudent to protect yourself against the costs of tax enquiry through Tax Fee Protection Insurance. After all, you wouldn't drive your car without insurance!

HMRC Connect is responsible for identifying more than 80% of the taxpayers HMRC choose to enquire in to. The system collects data from 30 sources, including UK and offshore banks, Companies House, the Land Registry, estate agents, the DVLA and other licensing authorities, and social media. The data can be instantaneously reviewed by more than 3,000 HMRC investigators to produce a financial fingerprint for any taxpayer. If there are any discrepancies between tax returns or business accounts sent to HMRC, a tax enquiry will follow as sure as night follows day. Tax enquiries started from 'Connect' have produced billions of pounds in additional tax over the last few years. Using 'Connect', HMRC can now target enquiries more accurately than ever before – but they still get it wrong sometimes. That's why we will always challenge HMRC regarding their perceived risks for opening an enquiry when defending clients.

At AAB, we offer our clients protection through Qdos Advantage, which is the market leader in Tax Fee Protection Insurance for the UK. We have selected Qdos as our Insurance partner in line with our promise to save our clients money and provide them with peace of mind.

Quick Facts

Tax Fee Protection Insurance Quick Facts

Tax Fee Protection Insurance – The Facts

  • Tax Fee Protection Insurance covers the enquiry fees for HMRC enquiries into a range of taxes, including Corporation Tax, Income Tax, PAYE/NIC, IR35, VAT, Inheritance Tax and many more.
  • As with other insurance policies, coverage will only be provided if insurance is in place prior to the enquiry being issued by HMRC. It is therefore incredibly important that taxpayers consider the risk of failing to invest in Tax Free Protection Insurance.
  • The policy covers up to £100,000 towards your fees for co-operating with an HMRC Enquiry.
  • Policies range from £180 - £500 annually per individual tax entity, including businesses with turnover of up to £25m. Discounts are available for group policies and specialist quotes can be provided for businesses with turnover in excess of £25m.

Finally, some taxpayers may opt to avoid paying professional fees and insurance altogether, opting to deal with the enquiry themselves. This is not a recommended approach for taxpayers under enquiry to follow, as we have seen many examples of individual and companies having to pay considerably more tax, interest and penalties than they may have actually been liable for.

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