Fee protection insurance

Produced by Tolley

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Fee protection insurance
  • Professional fees insurance
  • Full enquiries
  • Aspect enquiries
  • Business inspections
  • VAT disputes
  • PAYE / NIC disputes
  • PAYE / VAT compliance visits
  • Pre-dispute cover
  • IR35 disputes
  • More...

Fee protection insurance

Professional fees insurance

Professional fees insurance has been popular since self-assessment was introduced. Self-assessment heralded the start of the formal enquiry regime, and businesses soon emerged which provided insurance covering the professional fees associated with such enquiries.

At first it was commonplace for policies to cover only full enquiries (a full books and records review), but not enquiries into one or more specific aspects of a tax return. Less common investigative tools, such as Code of Practice 8 investigations (cases where fraud is not suspected but large amounts of tax may be at stake, typically covering avoidance schemes) were not covered.

Nowadays, professional fees insurance is much more sophisticated. Different terms can be discussed with the various providers, but typically some or all of the following types of enquiry might be covered.

Full enquiries

These involve an extensive examination of the tax position of an individual, partnership or company. HMRC will consider all aspects of the self-assessment return and undertake a comprehensive review of all books and records underlying the entries made on the return.

Aspect enquiries

This is where HMRC enquires into one or more aspects of the self-assessment tax return. This can range from a simple clarification of particular entries to detailed consideration of whether those specific entries have been treated correctly for tax purposes.

While it may involve a check of the records

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