Tax Enquiries - Everyone is at risk

 

Anyone who sends in a tax return or business accounts to HM Revenue & Customs (HMRC) is at risk of a tax enquiry or inspection. Thousands of individuals and businesses are selected for such checks every year. 

If it happens to you, the questions will be detailed and time consuming to answer. Even if HMRC does not find any extra tax to pay, the costs to defend you could be substantial and can easily amount to hundreds or thousands of £s.

Most accountant’s normal annual fees do not cover the additional professional costs of handling tax enquiries and compliance checks.  You can obtain protection against the potentially high costs of such fees simply and inexpensively by subscribing to our Tax Fee Protection (TFP) insurance cover. 

Follow our step by step guide below to find out more.

 

 

Claims Examples

A husband and wife partnership selling and installing double glazing was investigated by HMRC. At a meeting, HMRC alleged the husband had been dishonest. By the end of a long and detailed enquiry, HMRC repaid £129 of tax to the partnership and apologised, confirming that the allegation of dishonesty was a case of mistaken identity. Accountancy fees were approximately £5,000 and were paid in full by Qdos Vantage.

Business accounts for a wine shop were challenged by HMRC. HMRC claimed that expenditure of more than £150,000 on improvements to the shop front and interior was not allowable for tax purpose and that additional tax of £30,000 was due. Further detailed research into the relevant tax law and previous tax cases was necessary to dispute HMRC’s contentions. In the end, HMRC allowed the expenditure in full. Fees of £3,000 were paid in full by Qdos Vantage.

A property developer had a VAT Compliance Review. Following the review, HMRC contended that because the client was making both exempt and VATable supplies, they should not have recovered 100% of input tax from previous years. The client’s accountant successfully disputed this on the basis that the client was below the partial exemption de minimis limit, avoiding a potential VAT liability of more than £20,000. Accountancy fees of £3,700 were incurred and were paid in full by Qdos Vantage.


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