The majority of tax enquiries are now generated by

computer “risk profiling” while others are selected completely at random.

As a result, HM Revenue & Customs (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.

Anyone who submits a tax return can come under scrutiny. Every year, HMRC start enquiries into many 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. A record £30.4bn of additional tax was collected through compliance checks in 2020/21, with a 9% increase in the number of enquiries opened, and this is set to continue as HMRC look to recover the cost of the pandemic.

Not paying for our fee protection service could be a false economy. The potentially high costs of defending you in an enquiry would be much less affordable than the small annual charge. One thing is certain – HMRC does not stop making enquiries into tax returns when there is an economic downturn. The amount of debt the government is in at present is only likely to increase the potential threat of an HMRC enquiry!

Like any other protection to meet an unexpected cost, everyone hopes that they don’t need it but when a costly enquiry starts, clients are glad that they’ve paid the small annual charge for the peace of mind it extends in the event of an investigation.

• We will defend you, if and when you are selected for

a tax enquiry by HMRC.

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• The potentially high costs of professional fees for

that defence will be claimed under the practice’s

insurance policy.

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• It will not be necessary to accept unreasonable tax

charges by HMRC due to concerns about

professional fees.

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• You will also get free access to a 24/7 Business

Legal helpline and a separate Employment Law,

Health & Safety helpline

Under the Service, subscribing clients will be fully protected and the practice will claim under our own insurance policy for up to £100,000 of professional costs, in the following circumstances:

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• An HMRC enquiry into a personal or business tax return.

• An HMRC enquiry into any business accounts, including those of sole traders, partnerships and limited companies.

• A dispute with HMRC where additional VAT is being pursued.

• A dispute with HMRC where additional PAYE tax or National Insurance contributions is being pursued.

• A dispute with HMRC relating to the tax status of employees or subcontractors.

• A dispute in relation to CJRS/SEISS claims.

• An enquiry arising from a HMRC ‘nudge’ letters.

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A summary of Service document detailing cover is available upon request.

Some costs will not be protected under the Service, including the following:

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• Outstanding taxes, penalties, interest or any other amounts due to HMRC.

• Defence of clients in criminal prosecution cases or serious fraud enquiries.

• Fees relating to pre-existing tax enquiries, or enquiries where tax returns were submitted to HMRC later than the statutory time limits (90 days).

• Tax avoidance schemes.

• A Summary of Service document detailing cover is available upon request.

Such cover will normally be limited and not as wide ranging as the practice service. Such policies may not pay our fees to look after you and may instead bring in an outside consultant who doesn’t know you.

The questions asked by HMRC are usually very detailed and time-consuming to answer. The costs 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 protected by the normal annual fees paid to us.

Under the Service, subscribing clients will be fully protected and the practice will claim under our own insurance policy for up to £100,000 of professional costs, in the following circumstances:

​

• An HMRC enquiry into a personal or business tax return.

• An HMRC enquiry into any business accounts, including those of sole traders, partnerships and limited companies.

• A dispute with HMRC where additional VAT is being pursued.

• A dispute with HMRC where additional PAYE tax or National Insurance contributions is being pursued.

• A dispute with HMRC relating to the tax status of employees or subcontractors.

• A dispute in relation to CJRS/SEISS claims.

• An enquiry arising from a HMRC ‘nudge’ letters.

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A summary of Service document detailing cover is

available upon request.

To ensure seamless protection, the business fee protects enquiries into the tax returns of the directors, partners, members and their spouse and company secretaries - providing we prepare their tax returns.

VFP is a leading provider of Tax Fee Protection Service. Vantage Tax Fee Protection Ltd is an appointed representative of Vantage Protect Ltd (FRN 772055) which is authorised and regulated by the Financial Conduct Authority. They are committed to working in conjunction with us, in order to ensure your interests are fully protected.