[Carl2009]

Hi guys

My accountant does my tax return and P and L account each year. I've just received a letter from them (it's a multi-partner agency, not a single accountant working by themselves) saying that HMRC are conducting more and more investigations and such investigations take time and can cost a lot of money (in terms of accountancy fees).

They are suggesting an insurance policy to protect against such costs, for £85 per year. The insurance provider is Taxwise Services Ltd (http://www.taxwise-online.com/). Cheque to be made payable to them, not the accountants. Clearly the accountants will get a commission.

I'm trying to get a handle on how many people (you guys :-) ) have been investigated, how long did it take and what were the costs? Has anyone else had Taxwise or similar insurance and had cause to use it? Has anyone else been approached by their accountants suggesting such insurance?

I don't really want to pay another insurance, but can see that there are more and more investigations and whilst I am clean and all is in order it could well cost me more than £85 if I was picked as someone to be investigated.

Cheers

[steve rix]

As a trade that has a lot of cash transactions we ARE liable to be investigated by HMRC. We have insurance via our accountants but I'm not sure of the cost, it's included in the monthly bill.

[Window Lickers]

As a trade where more and more of businesses are using accounting software such as Aworka and Cleaner Planner so long as you are honest you havent got a great deal to concern yourself with, if youre insured you turn your books over and let them get on with it essentially.

We're isnured via the F.S.B. we use an accountant and we use round software, Im not sure there are any other things to do to try to make life any easier if youre picked. As honest as the day i was born regarding tax, I sleep easy these days.

[Carl2009]

Yep, I'm all above board too, but I'm just wondering if £85 is a good investment. It may well cost me more than that in fees if I am investigated.

[PCM LTD]

Hi,

Window cleaning business's are simple to run and account for. I've had a VAT inspection recently and I found it quite informative. They told me when they was due to arrive so I had things in general good order.

The visit lasted for about four hours at our business premises. The compliance officer will not touch your computer, he is not allowed to on a first visit. You need to be able to demonstrate that the software you use is fit for purpose and robust enough to be able to give accurate figures. You need to be able to produce reports and figures from the software when asked by the compliance officer.

Your VAT/TAX receipts need to be available to view and be in order. All bank statements etc need to be present. All goods purchased for business need to be available for audit.

The whole process is harmless if you have nothing to hide. They are very good at their jobs and like to drill deep down into the figures.

I personally wouldn't pay for insurance.

Hope this helps/

[Carl2009]

That's helpful. I use Roundtracker and that tracks all sales and expenses. I only ever claim for legit business expenses and all bank statements are here. Everything is reconciled on a daily basis. I do a projected cashflow so I know what's coming up, and a P and L account to forecast/estimate my tax. The P and L is almost the same as the accountant produces lol. I'm not VAT registered so that's simple.

[Dave Willis]

So... how does the insurance work? What does it do?

[Small but perfectley formed]

Its scaremainer in  ,if loads of people get investigated do you think £85 would cover the work involved.

[Perfect Windows]

Its scarenumptyer in  ,if loads of people get investigated do you think £85 would cover the work involved.

No, but that's not how insurance works, is it?  Do you think your van repair if you have an accident will be covered by your one premium?  Of course not.

So, imagine an average accountant's fees for a tax investigation was, say £6,000^* and one in one hundred businesses are investigated^*, then the insurer would collect £8,500^* and pay out £6,000^* of fees.  Happy customers, happy insurers, happy accountants. 

Vin

^* Don't argue the specific figures; they are made up to illustrate the point.

[Jonny 87]

Or am I right in thinking if you get investigated you have to stump up fees for the accountant???

I have an accountant but just for the end of year tax return.

I thought if you get investigated the only money you would have to pay is outstanding tax that hmrc decide you owe?

[CleanClear]

Hi guys

My accountant does my tax return and P and L account each year. I've just received a letter from them (it's a multi-partner agency, not a single accountant working by themselves) saying that HMRC are conducting more and more investigations and such investigations take time and can cost a lot of money (in terms of accountancy fees).

They are suggesting an insurance policy to protect against such costs, for £85 per year. The insurance provider is Taxwise Services Ltd (http://www.taxwise-online.com/). Cheque to be made payable to them, not the accountants. Clearly the accountants will get a commission.

I'm trying to get a handle on how many people (you guys :-) ) have been investigated, how long did it take and what were the costs? Has anyone else had Taxwise or similar insurance and had cause to use it? Has anyone else been approached by their accountants suggesting such insurance?

I don't really want to pay another insurance, but can see that there are more and more investigations and whilst I am clean and all is in order it could well cost me more than £85 if I was picked as someone to be investigated.

Cheers

I'd be looking for another accountant if i got a letter like that off mine, inviting me to be ripped off for £85.
  As far as i'm aware, its free to hand your stuff over to the HMRC for them to inspect it. I'd also ask the accountant exactly what that insurance payment might cover them to do that they arn't aready doing for you ?
 Mind you they're owned by Peninsular Buisiness Services, what else can you expect.

[Smudger]

£85 is not a rip off, it's just an insurance policy, we get ours covered by being a member of the FSB


yes, it maybe free to hand over your accounts, but you will have to be able to answer any question they ask and accept the Hugh bill they think you owe.

I also understand that if you use an accountant even for basic stuff they will go through them for every detail using many, many hours of your accounts time and as most accounts will charge £50 plus an hour for an investigation you will have to pay the bill running into thousands of pounds even if you can justify every bill, invoice and cash brought in.

Darran

[Window Lickers]

Its scarenumptyer in  ,if loads of people get investigated do you think £85 would cover the work involved.

I hope you dont have the same attitude with vehicle insurance.

[Small but perfectley formed]

Vehicle insurance is a legal requirement ,tax investigation insurance is another revenue stream for your accountant / commission

[elite mike]

if i remember rightly i think ian giles has had 2 or 3 tax investigations 

my father in law had 2 and the time lost dealing with HMRC   COST A DAMN SITE more than £80 

so it seems good value to me .But you could go all your working life and not have an investigation.

[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 ?

[Window Lickers]

Assuming you give your accountant the correct figures.

[Nick Day]

I've had one of these. Believe me ... pay the £85.00. It cost me £1500.00 with full accounts by chartered accountants for 15 years of trading. Remember if they find an underpay they can at least double it as a penalty.

[HampshireWindowCleaning]

Mines just charged me about £150, the cheeky git

[Mike #1]

Your accountant goes off the information provided by each client if you have made an accounting error which you have not made your accountant aware off then you are liable not your accountant .

The one the one thing it does not insure is dishonesty . Mike