Invoice from accountant for insurance
Discussion
Someone I know was subject (unjustified) to some interest from HMRC, and having paid insurance was not to fussed. However, the nature of their interest (not a full blown investigation) led to there being a limit on the value the insurance would cover(Inquiry v Investigation?).
HMRC failed to recover they £5k's worth of tax they belived due to them thanks to the accountants.
The accountants made about £7k's worth of fees
The insurers only paid out about £3k to Accountant.
This Led them to question whether they would continue with the policy costing a few hundred a year.
HMRC failed to recover they £5k's worth of tax they belived due to them thanks to the accountants.
The accountants made about £7k's worth of fees
The insurers only paid out about £3k to Accountant.
This Led them to question whether they would continue with the policy costing a few hundred a year.
One of the problems is that the Revenue has dropped the term "investigation" when referring to their questioning processes. Essentially, as tax is now collected under a Self Assessment system (even Corporation tax), they call these processes "enquiries". The insurance policies tend to only pay up
i) if the "enquiry" is a full blown affair (the equivalent of the old fashioned "investigation").
ii) is not a fairly simple question on a tax return - unfortunately, these simple queries are also called "enquiries" by the Revenue but this type of low level questioning will normally not be covered by the insurance.
iii) the insurers will be reluctant to pay up if the client or the accountant has brought about the enquiry through gross negligence or a genuine attempt to deceive the Revenue.
i) if the "enquiry" is a full blown affair (the equivalent of the old fashioned "investigation").
ii) is not a fairly simple question on a tax return - unfortunately, these simple queries are also called "enquiries" by the Revenue but this type of low level questioning will normally not be covered by the insurance.
iii) the insurers will be reluctant to pay up if the client or the accountant has brought about the enquiry through gross negligence or a genuine attempt to deceive the Revenue.
Edited by Eric Mc on Thursday 13th November 14:18
AndyAudi said:
The accountants made about £7k's worth of fees
The insurers only paid out about £3k to Accountant.
This Led them to question whether they would continue with the policy costing a few hundred a year.
I spoke to both my accountants and Abbey Tax and these are my worldly wise findings;
The price I quoted earlier of £278 was as an independent company to Abbey Tax direct, somehow my accountants missed them off their blanket account with them but covered another of my companies under their membership of Abbey Tax. Cost for that company £ 143 so half. Excess £200.00 on each enquiry, same as an independant. However, cover through accountants then max amount £10,000, and also enjoy "aspect enquiry cover" but not as an independent but, as an independent then max cover £75,000 so there is a trade off. I am renewing all my interests through accountants as the aspect cover (max £1,000)is more likely than full investigation. £10k also buys a lot of accountants time as well, VAT reclaimable so it is a net figure.
Had the offer from my accountants this morning at £150 with Peninsula Business Services.
It has exclusions; late submissions and provision figures, Special compliance office investigations, things you ought to have known about (bit of a catch all there then), criminal prosecutions, and sec 60 VAT investiogations.
Up to £75k of support in an investigation.
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