Fee Protection Cover

Why do I need Fee Protection Cover?

The risks involved in an HMRC enquiry are becoming increasingly severe. You’ve probably heard of a few of the biggest investigations, typically involving high-profile tax evaders, avoidance schemes or offshore tax dodging. What you might be less aware of is quite how much cash HMRC is raking in on enquiries into ordinary taxpayers.

For every £1 HMRC spends on enquiry work they claw back £20. That’s an impressive rate of return in anyone’s book!

This figure goes a long way toward explaining why the taxman’s digging a little deeper into normal taxpayers and businesses’ affairs these days.

What are the risks of an HMRC enquiry?

With the chances of an HMRC enquiry on the rise, new investigatory powers are coming into play. These include the right to visit premises and inspect financial records. Tax investigations are at an all-time high, and are getting ever more complex. That, in turn, ramps up the cost of handling them, both in terms of time and money.

It might start with a VAT investigation or the ever-popular NIC or PAYE compliance check. These are pretty time-consuming in themselves, but are really only HMRC’s foot in your business’ door. Often, you’ll quickly find them looking into things like company accounts, Corporation Tax and Construction Industry Scheme paperwork. Working through all this can be strenuous and stressful – and you won’t have any clear idea of the financial costs until they’re already stacking up. Accounting fees can escalate quickly, drawing resources away from where they’re really needed.

What are the key benefits of Fee Protection Cover?

To help tackle the costs and dangers of HMRC enquiries, RIFT is introducing Fee Protection Cover. This service protects you against professional fees resulting from HMRC enquiries, leaving you free to manage your business while RIFT resolves the enquiry for you.

  • We will defend you, if and when you are selected for a tax enquiry by HMRC.
  • The (potentially high) cost of that defence will be covered by RIFT Accounting.
  • You won’t be pressured into accepting unreasonable HMRC tax charges by concerns over professional fees.

What’s included in my cover?

RIFT Fee Protection covers you for up to £3,000 of our professional fees per 12 months, and includes:

  • Corporation Tax and Income Tax enquiries.
  • VAT/PAYE/CIS compliance visits.
  • PAYE/NIC/CIS disputes.
  • VAT enquiries and disputes.
  • CIS, IR35 and other status enquiries.
  • Business records checks.
  • Interventions cover.

What am I not covered for?

The cover does not include:

  • Code of Practice 8 (underpaid tax re complex tax arrangements / tax avoidance schemes).
  • Application for a judicial review.
  • Professional services not completed by RIFT Accounting.
  • Costs of fixing deficiencies in company books, which is work ordinarily capable of being completed by policyholder.
  • Minimum wage, student loan and tax credit enquiries.
  • Returns that are late by 90 days or more.
  • Any claim involving an investigation of fraud.
  • Claims where we are not the tax return agent when the enquiry/dispute commences.

What’s it going to cost me?

RIFT Fee Protection means always knowing that your accountant is available with first-class service, and no worries about the fees for the initial work.

  • If your Limited Company is below the VAT threshold, or is exempt from charging VAT, the cost will be £115 + VAT annually.
  • If your Limited Company is above the VAT threshold,the cost will be £215 + VAT annually.
  • If your Limited Company has a turnover of more than £400,000 per annum,the cost will be £395 + VAT annually.

All payments are made in advance and claims are only valid when all payments are up-to-date. Payments are made annually and are only available to RIFT Accounting clients for whom we submit company accounts and tax returns.

If you need RIFT’s help with an enquiry from HMRC, but don’t have Fee Protection Cover, our minimum fee will be £180 + VAT for the first hour to ascertain the requirements, then £90 + VAT per hour (plus disbursements).

Fee Protection Cover FAQ

I've done nothing wrong. Why should I worry about a tax enquiry?
Most tax enquiries are generated by computer "risk profiling" and many are selected at random. Even if you’ve got nothing to hide, the taxman will still try hard to find errors. Enquiries are just too much of a money-spinner to drop.

Can anyone's tax affairs be scrutinised by HMRC?
Anyone who submits a tax return can fall under the taxman’s microscope. Every year, HMRC start enquiries into many thousands of personal and business tax returns and accounts. VAT and PAYE payments are also thoroughly checked. The aim in every case is to collect more tax.

I need to reduce my spending.
Not getting yourself covered could be a classic “false economy”. The potentially high costs of defending against an enquiry would be much less affordable than the annual charge. One thing is certain: HMRC won’t stop making enquiries into tax returns.

I don't think I need protection.
Like any other protection against unexpected costs, everyone hopes they never need it. When a costly enquiry starts, though, you’ll be glad you took precautions.

I've already got some protection through a trade subscription or policy.
This kind of cover’s likely to be limited and not as wide-ranging. Your policy probably won’t cover the cost of RIFT looking after you - instead leaving you dealing with an outside consultant who doesn't know you or your business.

How much could a tax enquiry cost me in professional fees?
The questions asked by HMRC are usually very detailed and time-consuming to answer. Defending yourself can easily run you thousands of pounds, even if little or no extra tax is paid at the end of the enquiry. These costs are not protected by our normal annual fees.

What’s protected by the business fee?
To ensure seamless protection, the business fee protects enquiries into the tax returns of the Directors, Partners, their spouses and company secretaries - providing we prepare their tax returns at RIFT Accounting.

Give us a call today if you'd like more information.

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