Professional Fee Protection Service
Professional Fee Protection is an optional scheme to cover accountancy fees should you be unfortunate to have an HMRC tax enquiry and disputes.
The Importance of Cover
HMRC has wide ranging inspection powers across all taxes.
No reasons have to be given for opening enquiries and often they can be triggered for no apparent reason.
Some of the risks faced are:
> Full HMRC enquiries into accounts or returns – companies and individual taxpayers – including a small number of random enquiries
> Enquiries arising from HMRC “task forces” in specific sectors or area
> “Aspect” enquiries into part of a return
> Disputes from VAT and PAYE inspections
> IR35 disputes
> ‘Interventions’ – HMRCs powers to inspect records and businesses outside of traditional enquiries
> Cross tax enquiries – where HMRC looks at VAT, Income Tax, PAYE and Corporation Tax together
> Surprise visits – HMRC can visit business premises to review records, with no prior arrangement
> HMRC intelligence, eg HMRC targeting credit card companies to supply details of all merchants, eBay to provide details of traders and similar
Even if HMRC find nothing to assess, the fees to defend such enquiries and reviews can be substantial; because of their unpredictability our fixed fee agreements cannot cover the time taken to administer any HMRC enquiry.
The Peloton’s Professional Fee protection Scheme…
In conjunction with Croner Taxwise (an insurer and adviser) we offer a Fee Protection Service (under our own insurance policy) to cover our fees, which would otherwise be payable by you, as the client. Participating members of this scheme have cover for up to £100,000 of our fees or those of a Croner approved consultant for the events detailed at the bottom of this page.
Some costs are not covered by this service, these are listed at the bottom of this page.
Free professional helplines included in the service
As a further service enhancement, Croner Taxwise include free direct access to:
> A Legal helpline – giving you access to experienced solicitors who will advise you on all areas of law including contract, property and landlord & tenant
> A Health & Safety advice line – helping with any workplace issues
> Employment Law advice line – helping you to manage any potential employment issues
The scheme runs annually from 1st July to 30th June and the annual service charge is set out below.
|Premiums – including VAT|
includes the personal returns of the partners/directors & their spouses and company secretaries (where we prepare the tax return). Excludes rental income in excess of £50,000 per annum (before expenses) or any other business activities. We must also be the tax return agent at the time the enquiry commences.
A VAT receipt will be provided once we receive your remittance.
If you are joining the scheme after 1 July, the premium will pro rata’d accordingly for the remainder of the annual term with optional renewal on 30th June
If you have any further questions relating to this scheme, please get in touch.
The service is, of course, not compulsory but should you decide not to take advantage of this, you will be “self-insured” and fully liable for all any additional fees incurred in defense of any enquiry.
HMRC Enquiries included in the service:
- > A Full Enquiry – This is an extensive examination which considers all aspects of the self-assessment tax return. It will involve a comprehensive review by HMRC of all books and records underlying the entries made on the return. It will also feature the issue of a notice under S9A/S12AC TMA 1970 or paragraph 24(1) Schedule 18 FA 1998.
- > An Aspect Enquiry – This is where HMRC enquires into one or more aspects of the self-assessment tax return which may involve clarification of entries, to detailed consideration of whether those entries have been treated correctly for tax purposes. It may involve a check on the records upon which the entries were based. It will also feature the issue of a notice under S9A/S12AC TMA 1970 or paragraph 24(1) Schedule 18 FA 1998.
- > A Business Inspection Notice – This is where HMRC exercise their power to request entry to a person’s business premises and inspect the business premises, assets, goods and documents. It will feature the approval of an “Authorised Officer” of Revenue & Customs and the issue of an Inspection Notice for a short notice or unannounced visit or where the proposed inspection has been approved by the First Tier Tribunal. The notice will be issued under Schedule 36 paragraph 12(2) FA 2008.
- > VAT/PAYE/CIS Compliance Visit – This is where HMRC wish to carry out a routine PAYE/VAT/CIS Compliance Visit where it is considered that professional representation is necessary, and the matter cannot be dealt with by the client alone.
- > VAT Dispute – This is a challenge by HMRC to the accuracy or completeness of returns submitted. It will feature a disagreement over both the way in which VAT has been operated and over the amount of VAT due.
- > PAYE/NIC/CIS Dispute – This is a challenge by HMRC to the accuracy or completeness of returns submitted in accordance with Pay As You Earn/CIS Regulations. It will feature a disagreement over both the way in which PAYE/CIS has been operated and over the amount of PAYE/NIC due.
- > Employment Status Dispute – Where HMRC state that an individual previously classed as self-employed should have been subject to PAYE.
- > IHT Cover – This relates to an estate or trust where our involvement is considered necessary following the submission of an IHT return which has been wholly prepared by us.
- > Gift Aid Inspections – Where a registered charity operating a Gift Aid Scheme with HMRC is being reviewed.
- > Partners/Directors Cover – Where a partnership or limited company join we may also make a claim in the event of either an aspect or full enquiry into the personal returns of the partners and directors and their spouses and company secretaries (where we prepare the tax return). This automatic cover will not extend to rental income in excess of £50,000 per annum (before expenses) or any other business activities. We must also be the tax return agent at the time the enquiry commences.
- > Application for a Judicial Review – This is an application (during the course of a valid claim under the Policy) to the Administrative Court to challenge a decision of an official where no other legal recourse is available to the applicant. The limit of indemnity for this is £5,000.
- > Code of Practice 8 Investigation – This is where HMRC Specialist Investigations conduct an investigation in accordance with Code of Practice 8. The limit of indemnity for this is £15,000.
- > IR35 Status Check – This is where HMRC write asking if it has been considered whether the client falls within the scope of IR35.
- > IR35 Dispute – This is where HMRC states a client should be subject to the IR35 legislation following a PAYE Compliance Visit or the issue of a notice under paragraph 24(1) Schedule 18 FA 1998. It will feature a disagreement over whether this legislation applies.
- > Interventions (Informal Enquiries) – This is where HMRC issue a routine letter or telephone call with a view to obtaining clarification on particular points on a self-assessment tax return without the issue of a statutory notice and not dealt with or excluded under any other section of this policy.
The Main Exclusions in our service are as follows:
- > The costs of making good any deficiencies in books, records, accounts or returns or work ordinarily capable of being done by the client.
- > Claims which originate from any matter which existed before the first period of our insurance policy except where full disclosure has been made and the increase in risk has been accepted in writing.
- > Minimum Wage, Student Loan and Tax Credit Enquiries.
- > CIS Gross Payment Status Disputes.
- > Returns which have been submitted more than 90 days late.
- > Any claim involving the Civil Investigation of Fraud procedure (Code of Practice 9) or Specialist Investigations/Fraud Investigations except where a Code of Practice 8 booklet has been issued.