Tax investigation insurance

[Nigel Wellings]

I have not dealt with DAS legal expenses for last 10 years and will not do so.I agree with some of the previous comments about them.
The one advantage of organising this sort of cover via your Accountant is that they can do the work. If Insurers send an external accountant in you will end up being charged by your own Accountant for work they have to do.
Rural Protect is probably the best legal expenses policy in the market. It does cover Accountants fees, but the much wider cover provided by it for many other legal defence areas is far more important. It is relatively expensive though.

 

[Still Farming]

I don’t have to attend.
Maybe you have time I don’t

You be summoned don't worry about that!

 

[livestock 1]

You be summoned don't worry about that!

You are very naive

 

[Bongodog]

My 1st accountant never ever mentioned this insurance, when we switched to a larger firm we received the letter every year "strongly advising" that we pay the insurance premium which we duly dropped through the shredder, the partner we dealt with never once mentioned it. We followed him when he set up on his own, each year since we have had the letter, but once again its gone through the shredder and hes never mentioned it. Must be really important for him to never query our non payment

 

[neilo]

I have not dealt with DAS legal expenses for last 10 years and will not do so.I agree with some of the previous comments about them.
The one advantage of organising this sort of cover via your Accountant is that they can do the work. If Insurers send an external accountant in you will end up being charged by your own Accountant for work they have to do.
Rural Protect is probably the best legal expenses policy in the market. It does cover Accountants fees, but the much wider cover provided by it for many other legal defence areas is far more important. It is relatively expensive though.

Yes, that's the one I have. It was cheaper than the accountant's policy, for wider cover, but they doubled the premium last year. I guess too many people must have been claiming on it?

 

[Still Farming]

You are very naive

So are you pal.
Been through it all THANKYOU .

 

[livestock 1]

So are you pal.
Been through it all THANKYOU .

The big selling point of the insurance to me was I don’t have to attend
Now you can sit and bang your drum or whatever you want makes no odds to me

 

[Still Farming]

The big selling point of the insurance to me was I don’t have to attend
Now you can sit and bang your drum or whatever you want makes no odds to me

Ha Ha.
No toss to me what you think or want to think just real life experience.
Some people think their above everything?

 

[Nigel Wellings]

Yes, that's the one I have. It was cheaper than the accountant's policy, for wider cover, but they doubled the premium last year. I guess too many people must have been claiming on it?

You are quite right, the premium has jumped because a lot of claims have been paid. It is the only one of these legal expenses policies I trust.
I still feel the £400 odd premium is worth it because of how good the cover is.

 

[Shughie McFee]

you have to insure against your accountants f**k ups ??

give me strength

 

[Highland Mule]

In maybe 20 years of business I've had two random tax investigations - one personal and one to Ltd Co. In neither case was I insured, and in both cases the accountants fee for the year was only about £1k more than a 'normal' year.

I'm not spending £100 or £200 for a 1/20 chance to save £1k. IMHO, insurance is best spent on those risks you can't afford to pay out - medical in foreign countries, 3rd party liability and the likes, not on accountant fees or extended warranty for a telly.

 

[ISCO]

In maybe 20 years of business I've had two random tax investigations - one personal and one to Ltd Co. In neither case was I insured, and in both cases the accountants fee for the year was only about £1k more than a 'normal' year.

I'm not spending £100 or £200 for a 1/20 chance to save £1k. IMHO, insurance is best spent on those risks you can't afford to pay out - medical in foreign countries, 3rd party liability and the likes, not on accountant fees or extended warranty for a telly.

This is what I think as well. I tend to lump this type of insurance together with such things as extended warranties on electrical goods and would use the money saved on meeting the cost myself.
Our business is simple and I would be happy dealing with any issues myself.

 

[neilo]

you have to insure against your accountants f**k ups ??

give me strength

Not at all, the insurance won’t pay any fine.

What it does cover is the accountant’s fees for the professional time he takes to answer each and every query the inspector makes. I am told they will normally come one at a time, over an extended period of time, racking up a lot of fees potentially.

A full tax inspection is for more time consuming than a VAT inspector sitting in your office drinking cups of tea for a day.

 

[MRT]

In maybe 20 years of business I've had two random tax investigations - one personal and one to Ltd Co. In neither case was I insured, and in both cases the accountants fee for the year was only about £1k more than a 'normal' year.

I'm not spending £100 or £200 for a 1/20 chance to save £1k. IMHO, insurance is best spent on those risks you can't afford to pay out - medical in foreign countries, 3rd party liability and the likes, not on accountant fees or extended warranty for a telly.

I agree with this statement wholeheartedly; the idea that dealing with HMRC yourself is a good idea because its free is erm - risky

 

[Still Farming]

I agree with this statement wholeheartedly; the idea that dealing with HMRC yourself is a good idea because its free is erm - risky

Possibly but HMRC answers to your questions are correct and final what ever your accountant tries to wrangle.

 

[MRT]

Possibly but HMRC answers to your questions are correct and final what ever your accountant tries to wrangle.

Yes, but that wrangling can be very successful and HMRC can get some very funny ideas to the point of being plain wrong

 

[Still Farming]

Yes, but that wrangling can be very successful and HMRC can get some very funny ideas to the point of being plain wrong

Pros and cons in everything.

 

[farmerdan7618]

I'll stick my head up as an accountant who offers this to clients. The price varies depending on the business, and it is in different bands.

It is to cover the cost of us dealing with an enquiry on your behalf, and is entirely optional. Although I will recommend it when there are things that are more likely to be enquired into on a return.

It does not cover any tax payable as a result of an enquiry - you can't insure against that, and it does not cover mistakes by us as accountants, our professional indemnity insurance covers that so it doesn't matter whether you took fee protection insurance or not.

An enquiry does not mean there is anything wrong, but that HMRC want more detailed information, it could be for VAT, PAYE, CIS or general income and corporation tax. The time taken to collate and provide the information varies depending on what is asked for, and how difficult the inspector wishes to be.

I've been involved in a few enquiries, but less than 1% of returns have been enquired into, none have resulted in extra tax to pay. Some have been insured with us, some on their general policy and some not insured. It makes no difference to level of service we provide, just who gets the bill at the end.

It's insurance at the end of the day, if people don't like risk it can be insured against, if it's not a big concern, then don't bother, just pay the fees if an enquiry comes along. If you wish to deal with your own enquiries, fair enough, but I would question whether you trust your accountant enough to keep using them in that case.

At the end of the day, you pay your money or take your chance, the insurer will always win overall, but you never know. It's not a legal obligation to insure against it and nobody is forced to.

 

[The Agrarian]

In a full tax investigation into a family farming partnership, can a tax inspector ask for personal spending accounts of all partners too?

 

[onthehoof]

I'll stick my head up as an accountant who offers this to clients. The price varies depending on the business, and it is in different bands.

It is to cover the cost of us dealing with an enquiry on your behalf, and is entirely optional. Although I will recommend it when there are things that are more likely to be enquired into on a return.

It does not cover any tax payable as a result of an enquiry - you can't insure against that, and it does not cover mistakes by us as accountants, our professional indemnity insurance covers that so it doesn't matter whether you took fee protection insurance or not.

An enquiry does not mean there is anything wrong, but that HMRC want more detailed information, it could be for VAT, PAYE, CIS or general income and corporation tax. The time taken to collate and provide the information varies depending on what is asked for, and how difficult the inspector wishes to be.

I've been involved in a few enquiries, but less than 1% of returns have been enquired into, none have resulted in extra tax to pay. Some have been insured with us, some on their general policy and some not insured. It makes no difference to level of service we provide, just who gets the bill at the end.

It's insurance at the end of the day, if people don't like risk it can be insured against, if it's not a big concern, then don't bother, just pay the fees if an enquiry comes along. If you wish to deal with your own enquiries, fair enough, but I would question whether you trust your accountant enough to keep using them in that case.

At the end of the day, you pay your money or take your chance, the insurer will always win overall, but you never know. It's not a legal obligation to insure against it and nobody is forced to.

Hi Dan, thanks for the reply, what I’m really wanting to know and nobody seems to have answered is is the NFU insurance worth the paper it’s written on if ot came to an investigation, it seems to be a grey area!