[slap bash]

If n insurance company charges 85 quid for there services then the odds of an investigation is very slim or they know they will never pay out anything to you. Check the odds.

[Perfect Windows]

Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?

That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect.  That's why it's an investigation; they are trying to find fault.  Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you).  The bill can easily run into thousands.  So it might be worth considering insurance, at least.

However, each to their own.

Vin

[SeanK]

Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?

That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect.  That's why it's an investigation; they are trying to find fault.  Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you).  The bill can easily run into thousands.  So it might be worth considering insurance, at least.

However, each to their own.

Vin

Its only an investigation if HMRC suspect that you have been up to no good, what some of us will get is a random check which for
a sole trader wont come to much.
They might find that you owe a few quid owe nothing or find that you have paid too much, until the audit is finished the accountant
doesn't need to get involved as the results will be sent to you the tax payer.
If you get a large bill which you suspect is wrong then arrange for your accountant to sort it out for a price.
If that price is going to cost more than the bill then pay the bill, its not rocket science even though some accountants would
try and make you believe it was.
Again if the accountant has done his/her job right and you have been honest then there wont be loads of questions to answer
just make sure you keep all your paperwork from 6 years previous.

[dave0123]

Doesn't matter if the accountant has done it wrong anyway as your legal responsibility to check it and sign it off and any proper accountants these days get you to sign a waiver to say this.

[SeanK]

Again guys its nothing to be concerned about even if you have made a mistake. If your randomly picked to be
audited the HRMC will take your books look at your turnover and claimed expenses over a certain number of years
anything up to six.
If they find you have underpaid then you get a bill.
But again if your accountant has done their job right then this shouldn't amount to much.
If they find a pattern in your finances in other words a deliberate attempt to defraud then worry because that's
when they will go over your books with a fine tooth comb.
Ask yourself will this insurance cover deliberate dishonesty ? I don't think so.
I'm always careful when an insurance company has to tell you a lie in order to sell you a product, with more
self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.

[Perfect Windows]

Your accountant does your tax returns so they should be in order.
HMRC takes the paperwork and checks that the accountant has done the job right.
This doesn't cost anything extra unless the accountant has made a mistake so why do you need
insurance to cover extra costs ?

That's not quite the process. HMRC take the accounts and questions everything in there, correct or incorrect.  That's why it's an investigation; they are trying to find fault.  Your accountant answers multiple questions on every single aspect of your accounts, for which he charges (as it's in excess of the work he's agreed to do for you).  The bill can easily run into thousands.  So it might be worth considering insurance, at least.

However, each to their own.

Vin

Its only an investigation if HMRC suspect that you have been up to no good, what some of us will get is a random check which for
a sole trader wont come to much.
They might find that you owe a few quid owe nothing or find that you have paid too much, until the audit is finished the accountant
doesn't need to get involved as the results will be sent to you the tax payer.
If you get a large bill which you suspect is wrong then arrange for your accountant to sort it out for a price.
If that price is going to cost more than the bill then pay the bill, its not rocket science even though some accountants would
try and make you believe it was.
Again if the accountant has done his/her job right and you have been honest then there wont be loads of questions to answer
just make sure you keep all your paperwork from 6 years previous.

You're probably right; the tales from the FSB website of people being audited, the audit dragging on for two years and running up £3,000 bills despite being found not to owe anything are probably just scarenmo ngering.  You'll definitely be fine as long as your records are OK.

Vin

[Perfect Windows]

with more self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.

I'm sure this is a lie: from http://www.accountancyage.com/aa/news/2345496/hmrc-tax-investigations-count-rises-significantly


"THE NUMBER of people being investigated by the HM Revenue & Customs has doubled in one year, figures disclosed under the Freedom of Information Act show.

HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011/12.

The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years."


You'll be fine.

Vin

[Carl2009]

with more self employed people than ever starting up and cutbacks to the public sector including the tax office your less likely to get an audit now.

I'm sure this is a lie: from http://www.accountancyage.com/aa/news/2345496/hmrc-tax-investigations-count-rises-significantly


"THE NUMBER of people being investigated by the HM Revenue & Customs has doubled in one year, figures disclosed under the Freedom of Information Act show.

HMRC made inquiries about the tax affairs of 237,215 people last year, compared with about 119,000 in 2011/12.

The number of self-employed people investigated has quadrupled in that time while annual prosecutions have risen sevenfold in three years."


You'll be fine.

Vin

I guess this answers part of my original question, about numbers being investigated. It seems that it is quite high. What I'm not sure about still is the costs involved, which is my primary concern (I run a legit business so I am confident I won't have a worry on that score). If an investigation includes a look through my books then they can fill their boots, and costs will be zero. If they want to take a fine tooth comb, they can do that but it might cost me something via my accountant, so £85 seems a small price to pay to cover that.

I guess I have some thinking to do.

[SeanK]

Yes I will be fine as I have a brother and a mate who have both been audited by the tax office
so I know the score.
My brother actually got an £800 rebate.
A two year investigation for a self employed window cleaner   For gods sake your not running Tesco's.

[Window Lickers]

For gods sake your not running Tesco's.

It would appear no-one is at the moment.

[Perfect Windows]

I guess this answers part of my original question, about numbers being investigated. It seems that it is quite high. What I'm not sure about still is the costs involved, which is my primary concern (I run a legit business so I am confident I won't have a worry on that score). If an investigation includes a look through my books then they can fill their boots, and costs will be zero. If they want to take a fine tooth comb, they can do that but it might cost me something via my accountant, so £85 seems a small price to pay to cover that.

I guess I have some thinking to do.

FSB membership is £170 per annum.  In addition to having tax investigation cover included, there are a raft of other benefits, like free banking (that pays you £25 a year!) and oodles of other stuff.  If I was being asked for £85 for insurance, I'd add another £85 and go for FSB membership every time.  Loads of benefits (including legal help).  Worth a look, anyway.

Vin

[DaveG]

For gods sake your not running Tesco's.

It would appear no-one is at the moment.