Tax enquiries have increased in number as HMRC looks to generate more tax to fund the enormous spend through the pandemic.
It is why, said RNS Partner Karen Lyth, clients should consider taking out Tax Fee Protection against such an enquiry.
“The firm has seen an uptake in the numbers of HMRC enquiries since Covid,” said Karen.
“It's ensuring measures put in place to support the economy through the pandemic have been utilised correctly.
“Anyone who submits a tax return can come under scrutiny.
“Every year, HMRC start enquiries into many thousands of personal and business tax returns and accounts.”
Most tax enquiries are generated by computer “risk profiling” while others are selected completely at random, said Karen.
“If you are subject to an enquiry we will represent you and our expertise will help save time and money in the long run.
“Our normal accountancy fees do not include the cost of dealing with enquiries which can be costly and complex, even if no additional tax becomes due.
“Our Tax Fee Protection protects against costs incurred dealing with HMRC enquiries.
“The potentially high costs of defending a client in an enquiry would be much less affordable than the small annual charge.
“It creates peace of mind in the event of an investigation.”
Karen said, under the service, subscribing clients will be fully protected against:
- An HMRC enquiry into a personal or business tax return.
- An HMRC enquiry into any business accounts, including those of sole traders, partnerships and limited companies.
- A dispute with HMRC where additional VAT is being pursued.
- A dispute with HMRC where additional PAYE tax or National Insurance contributions are being pursued.
- A dispute with HMRC relating to the tax status of employees or subcontractors.
- An enquiry arising from a HMRC 'nudge' letters.
Some costs not protected under the service include outstanding taxes, penalties, interest or any other amounts due to HMRC.
For further details about Tax Fee Protection, contact Karen or your usual RNS partner or manager.