Accountant offering me tax investigation service

[Enchanting Beauty]

Hi!
I have had a letter from my accountant offering me a service should I ever be investigated by the tax service.
For a yearly fee of £150 + VAT they will cover the costs I would incur in any investigations dealing with self assessment tax, record keeping etc.

I was wondering if anyone else has received anything like this & also if anyone thinks it is a good thing to have.
I see it as a good & bad thing...good thing to have as the costs if you are investigated are extortionate & you have to pay them even if the investigation goes in your favour.
But I also see it as just an extra cost for a one man band like myself, just another thing to pay out for every year!!!

Any advice would be appreciated
Thankyou x

 

[salonfrog]

The NHF and FSB both have this insurance as part of their annual subscription, plus a lot more included for the same amount. Worth looking.

 

[user 111574]

The accountancy firm I used to use would send me the same every year but I've never taken it out. My accountant himself said that it wasn't for small businesses like me, much more for large companies.

I'm told that if you ever did get inspected they would check things like your appointment book relates to your receipts and takings accurately.
Bank account tallies with takings & cash drawings. In theory they could ask to check your client records to ensure you're not hiding payments but I doubt they could do this now with all the data protection.
If you are VAT registered then you have a much bigger business that they might want to check out - in which case, you might find insuring against this more important.
I've always thought that if you being completely honest in all your record keeping, accounting processes and paying your tax bill, then what should you be worried about?!

 

[BannerPenguin]

I know the FSB cover this in their subscription. £150 + VAT a year isn't bad though and it's your own accountant dealing with it that would know you and your business better. If you're investigated the accountant bill will run easily into the 4 figures. I've heard anything from £3-6k banded about.

 

[salonfrog]

There’s an article planned for the Nov/Dec NHF magazine about what to expect during a HMRC visit by the way.

 

[Enchanting Beauty]

Thanks for your replies everyone.
I don’t believe I have anything to be worried about regarding an investigation, I do everything by the book it’s just the costs that go with it if an investigation should happen...it would wipe me out!
It’s good to know you line the tax mans pockets regardless of what happens!
Salonfrog I will take a look at the NHF & FSB you mentioned so thanks for that.

 

[salonfrog]

These are just my personal notes, so check the details before you sign up to anything:

SECTION 1 | Overview
HMRC have full rights to inspect your tax records and technically they don’t need to give you any notice (although in reality they tend to book a time to either visit you or ask you to provide supporting documents by).

The NHF have a good overview guide:

https://www.nhf.info/advice-and-res...-tax-inspection-of-your-hair-or-beauty-salon/

SECTION 2 | Insurance
Many businesses take out HMRC Investigation Insurance to cover such an inspection.
If the inspection is more than requiring a few papers (which it can very much be) you nay incur additional costs from your solicitor, accountant and bank. This insurance covers those costs and it’s well worth having it in place.

Here are 3 ideas of where to get insurance from:

1. NHF


As part of their membership, they include:

-The NHF Legal Lifeline (which offers free advice on tax matters)
-Legal Expenses Insurance (which covers you up to £50,000 against the costs of the investigation).

2. FSB


https://www.fsb.org.uk/benefits/advice/tax-investigation-protection

A tax advice helpline manned by Revenue-trained specialists

Former tax Inspectors to represent you during any HMRC investigation, who will liaise directly with your accountant as necessary

Tax Investigation Insurance – where we require assistance from your accountant any fees that we agree with your accountant are covered in your policy

IR35 legislation is covered

Corporation and Income Tax full and aspect enquiry protection

PAYE (Employer Compliance) / VAT representation
Cover up to £100,000 per individual claim

3. Direct from a Specialist
e.g. https://www.cronertaxwise.com/tax-investigation-insurance/

 

[salonfrog]

I promise you, I’m not on commission
but the NHF are giving £25 off NHF Membership
by Friday 28 September 2018
CODE: SUMMER18

 

[BannerPenguin]

I need to renew with the FSB. They sorted out my business insurance and always been good. Had a contractual issue and the legal helpline was fantastic.

 

[Enchanting Beauty]

These are just my personal notes, so check the details before you sign up to anything:

SECTION 1 | Overview
HMRC have full rights to inspect your tax records and technically they don’t need to give you any notice (although in reality they tend to book a time to either visit you or ask you to provide supporting documents by).

The NHF have a good overview guide:

https://www.nhf.info/advice-and-res...-tax-inspection-of-your-hair-or-beauty-salon/

SECTION 2 | Insurance
Many businesses take out HMRC Investigation Insurance to cover such an inspection.
If the inspection is more than requiring a few papers (which it can very much be) you nay incur additional costs from your solicitor, accountant and bank. This insurance covers those costs and it’s well worth having it in place.

Here are 3 ideas of where to get insurance from:

1. NHF


As part of their membership, they include:

-The NHF Legal Lifeline (which offers free advice on tax matters)
-Legal Expenses Insurance (which covers you up to £50,000 against the costs of the investigation).

2. FSB


https://www.fsb.org.uk/benefits/advice/tax-investigation-protection

A tax advice helpline manned by Revenue-trained specialists

Former tax Inspectors to represent you during any HMRC investigation, who will liaise directly with your accountant as necessary

Tax Investigation Insurance – where we require assistance from your accountant any fees that we agree with your accountant are covered in your policy

IR35 legislation is covered

Corporation and Income Tax full and aspect enquiry protection

PAYE (Employer Compliance) / VAT representation
Cover up to £100,000 per individual claim

3. Direct from a Specialist
e.g. https://www.cronertaxwise.com/tax-investigation-insurance/

Thanks for the details.
I think I shall probably go with the service through my accountants so it all goes through them...& to be honest this all goes over my head lol