Tax Fee Protection insurance
You would have been sent a letter from us regarding Tax Fee Protection insurance. I have gone through some FAQs you might have on this below. You should also look at the policy wording and summary of cover pdfs available on https://bannerqdosdirect.qdosconsulting.com/home/tfp-insurance
What is it?
Every individual and limited company is at risk of an enquiry or investigation by HM Revenue & Customs (HMRC). Although we are doing everything correctly and in good order the risk of an investigation will always be there regardless. No one can or should tell you otherwise. If it happens to you, the questions will be detailed and time consuming to answer. Even if HMRC does not find any extra tax to pay, there is still the hassle factor plus the costs to defend you could be substantial and can easily amount to hundreds or thousands of £s. You can obtain protection against the potentially high costs of such fees by taking out Tax Fee Protection (TFP) insurance cover if you so desire.
But is this not covered in your fees?
No. Our fees do not cover the cost of investigation.
What is the difference between an enquiry and an investigation?
An enquiry is simply a letter in most instances from HMRC asking for information. An investigation is when an Inspector of Taxes turns up at your Company’s registered address to go through the books and to question you thoroughly on your tax affairs.
What is covered?
Tax Fee Protection insurance (TFP) covers professional fees incurred defending clients when HM Revenue & Customs (HMRC) checks whether you have paid the correct amount of tax.
The costs of defence in most reviews carried out by HMRC under the tax legislation are covered, including full and aspect tax enquiries, VAT and PAYE/NIC compliance checks, Business Records Reviews, and more. You should read the pdf at the bottom of this link, https://bannerqdosdirect.qdosconsulting.com/home/tfp-insurance .
Why have you suddenly sent this?
There has been a lot of change in tax legislation of late and the present Government has a strong manifesto promise to increase tax revenues. In light of this the probability of an investigation by HMRC is greater now than before. We feel obliged to let our clients know of this and for them to make an informed decision as to whether they would like to take on any insurance against this or not. As you like.
Is this mandatory?
No this is not mandatory. It is your decision to make based on the information given and available. Many of our clients have this insurance in place already through IPSE (The Association of Independent Professionals and the Self-Employed), others have decided not to take it at all, whilst others have opted based on this letter. It is your choice based on your interpretation of the information and risk profile.