HMRC tax investigation fee protection service
HMRC’s stated purpose of visits is to “monitor the quality of accounting records and systems in support of future HMRC returns”, but in theory this gives them the power to disagree with the tax treatment of your business or personal tax affairs and raise a tax assessment as a result of any visit.
Also of significance is HMRC’s new approach to IR35 investigations. HMRC have recently established a number of offices around the country specifically tasked to address the avoidance of National Insurance, prompting a significant increase in the number of enquiries relating to IR35.
In response to this, Competex has recently entered into an arrangement with Taxwise Ltd to provide specialist tax support to participating Competex clients in the event of an HMRC investigation. Taxwise is part of the Peninsula group, and the insurance policy-backed arrangement enables clients to participate on payment of a low, fixed annual fee.
The arrangement provides cover for all possible enquiry activity, not exceeding a total cost of £100,000 (with no excess) for the following events:
- Written enquiries from HMRC
- Business record checks
- VAT compliance visits (from initial enquiry through to final conclusion regardless of whether there is a dispute)
- IR35 enquiries and disputes
- Corporation Tax enquiries
- Income Tax self-assessment enquiries
- PAYE/NIC employer compliance visits (from initial enquiry through to final conclusion regardless of whether there is a dispute)
- Attendance at any meeting with HMRC
Cover is included in respect of the personal self-assessment tax returns of company directors and their spouses/partners, provided these tax returns have been completed and filed by Competex.
This arrangement however does not cover the following circumstances:
- Routine compliance work and presentation of your affairs (e.g. the preparation and filing of self-assessment tax returns, accounts, P11Ds. P35s, VAT returns or any other statutory returns)
- Any taxes, interest, penalties and fines or any other duties that may be imposed by HMRC
- Enquiries or disputes resulting from tax returns which are submitted more than 30 days after the statutory filing date
- Fees incurred in reconstructing records that have been poorly maintained
- Pre-existing enquiries or disputes
- Enquiries or disputes involving tax avoidance schemes
- Enquiries or disputes where fraudulent evasion of tax is involved
- The defence of criminal prosecutions
This arrangement is generally designed to protect clients from unexpected and unwelcome costs that would arise as a result of an HMRC enquiry, and where appropriate would guarantee representation by specialist tax practitioners with day-to-day experience of handling such cases.