Insurance against HMRC inspection

[Leftie]

My accountant is offering an insuranmce policy for up to £75,000 to cover the cost of HMRC investigations and disputes for £150 PA.

Good value and necessary?

[steviebee]

Leftie said:

My accountant is offering an insuranmce policy for up to £75,000 to cover the cost of HMRC investigations and disputes for £150 PA.

Good value and necessary?

My limited knowledge of the accountancy profession would suggest that you may want to look for a new account.

Is it not a bit like hime saying: "look, I think i've done this right but I'm not sure ....."

[Eric Mc]

I presume this is part of a Fee Protection Plan of some sort.

This type of insurance has been around for years. Accountants take it out with the insurance company and then recoup their premium costs by encouraging as many clients as possible to sign up to the scheme. Like all insurances, it is up to you to gauge whether the chances of being investigated by HMRC are high, medium or low and act accordingly. The insurance usually covers you for any aditional fees your accountant might need to charge in helping you during the investigation. It doesn't insure you against any additional taxes you might have to pay (which could be substantially higher).

Edited by Eric Mc on Friday 17th November 20:17

[Leftie]

Eric Mc said:

I presume this is part of a Fee Protection Plan of some sort.

This type of insurance has been around for years. Accountants take it out with the insurance company and then recoup their premium costs by encouraging as many clients as possible to sign up to the scheme. Like all insurances, it is up to you to gauge whether the chances of being investigated by HMRC are high, medium or low and act accordingly. The insurance usually covers you for any aditional fees your accountant might need to charge in helping you during the investigation. It doesn't insure you against any additional taxes you might have to pay (which could be substantially higher).

Edited by Eric Mc on Friday 17th November 20:17

I am guessing/hoping I am fairly low on their list as my business takes no cash, clients are all Govt. depts, so only the expenses would be of interest so even if I got an inspection I wouldn't be to woried and I handled the VAT negotations myself.

Of Couse HMRC may choose me as the easy hit to reach their monthly targets for visits as I am told that scrap metal dealers with large dogs rarely get hit!

[david_s]

I've got it. In the unlikely(?) event that I have to account for some of my more debatable financial decisions I don't fancy getting an large invoice as well as 'a told you so' from my accountant.

[plasticpig]

£150 PA is not a lot. However how much does your account do. If he prepares you VAT returns,payroll and annual returns then dont bother. If he messes up then you can claim on his proffesional indemnity insurance. If howver he just does the annual return then it's probably worth while.

[Leftie]

plasticpig said:

£150 PA is not a lot. However how much does your account do. If he prepares you VAT returns,payroll and annual returns then dont bother. If he messes up then you can claim on his proffesional indemnity insurance. If howver he just does the annual return then it's probably worth while.

he does it all eccept payroll for me: £150 better spent on earning another £150.

[casbar]

My policy cost £50 a year

[Carrera2]

Leftie said:

plasticpig said:

£150 PA is not a lot. However how much does your account do. If he prepares you VAT returns,payroll and annual returns then dont bother. If he messes up then you can claim on his proffesional indemnity insurance. If howver he just does the annual return then it's probably worth while.

he does it all eccept payroll for me: £150 better spent on earning another £150.

Save your money IMO Leftie. I've had a couple of inspections now and it's not difficult to get them the info they need/debate issues with them if you've got a good grip of your business.