Taxpayers urged to protect themselves through HMRC Fee Protection Insurance, as investigations increase by 10%

Added by Love Business East Midlands | 12 January 2018

UPDATED: 12 January 2018

A rise in the number of tax investigations carried out by HM Revenue & Customs has prompted leading Chartered Accountants Newby Castleman to remind taxpayers of the benefits of  HMRC Fee Protection Insurance.

Tax professionals have seen a rise of approximately 10% in HMRC’s investigation activity in the last six months, from a level which was already very high.

HMRC can decide how, when and in what detail such investigations are carried out, and even comparatively simple and relatively straight-forward matters can result in substantial professional costs, which are payable even if the investigation does not result in additional tax liabilities. 

Tax enquiries can be sparked by various circumstances, such as inadvertent errors on a tax return, or financial statements containing figures inconsistent with standard industry performance. HMRC enquiries last on average 16 months and as well as being disruptive to business, in some cases can be extremely costly. 

Having proper representation can boost a taxpayer’s trustworthiness in the eyes of HMRC, and by taking out fee protection insurance such as that offered by Newby Castleman, taxpayers can reduce the amount of fees for which they may be liable in the result of an investigation.

Jacquelyn Kimber, Tax Partner for Newby Castleman, said, “Tax investigations are on the rise, as HMRC comes under increasing pressure from the government to target tax avoiders and raise revenue. Its operations are becoming increasingly efficient, and taxpayers should take appropriate steps to prepare for the eventuality of an investigation.”

Since a spending review in 2010, HMRC has launched 40 specialist taskforces aimed at extensive investigation into businesses and individuals. Combining this with its sophisticated Connect software, drawing data from banks, financial organisations and companies from over 60 countries, investigations are becoming more targeted and successful for HMRC.

Jacquelyn continued; “Newby Castleman offers trusted, professional advice and services to help reduce the risks, and the costs, associated with HMRC audits. Our HMRC Fee Protection Insurance policy can be of great benefit, and individuals and businesses should consider taking out a policy, or renewing their existing policy with us, at the earliest opportunity.”

Newby Castleman is one of the Midlands’ leading independent accountancy firms, with offices in Leicester and Loughborough. It offers a range of specialist financial services, business and tax advice for individuals and businesses. For further information, telephone the Leicester branch on 0116 254 9262, the Loughborough branch on 01509 263500 or visit the website at www.newbycastleman.co.uk.

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