Humphrey & Co
Tax Investigation Service

This page has been set up to manage the administration of our Tax Investigation Service (TIS).

This page has all the information you need to enable you to make a decision as to whether to proceed with the cover offered.

Service Overview

Humphrey & Co have offered a Tax Investigation Service (the 'Service') to our clients for several years now, and we invite all our clients to share in the protection offered.

Essentially the Service protects you from the cost of our fees in assisting you in the event that H M Revenue and Customs (HMRC) visit, or ask questions, about your personal or business tax affairs (subject to scheme limits).

The level of protection is extensive, and you could not only enjoy the benefit of our expertise at no cost in assisting with any form of tax enquiry, but also assistance with all variations of HMRC inspection or compliance visit into VAT, PAYE, National Insurance, CIS, tax credits, student loans and Gift Aid amongst others. No excesses apply and more detail about exactly what is included can be found on the resources section below.

In certain circumstances we can even include Tax Returns that have been filed after the appropriate deadline. Please see our FAQ’s for more information.

There are four different options available, and the correct one will depend upon whether or not you run a business, and if so, the legal status of your business (see below).

Why should I consider this?

It is our view that the Service represents best commercial practice for our clients, because:

  • Our fees in defending you against an enquiry are likely to cost you considerably more than the premium to join;
  • Many Tax Returns are selected for enquiry at random or as an indirect result of information found on forms submitted by other taxpayers;
  • Experience shows that year on year enquiries are on the increase in terms of both numbers and complexity;
  • Over 80% of all tax investigations by HMRC now arise from leads generated by its £80million database system, Connect, according to recent reports. The new reliance on automated systems to identify targets means taxpayers face increased risk of an investigation. Connect was first launched in 2010, to gather data and information from multiple sources, including banks, local councils, land registry and even social media;
  • Where applicable, the business owners' personal Tax Returns (and their partner's) are usually also included within our Scheme;
  • Our tax experts continue to act throughout the enquiry (i.e. no third parties are drawn in who are unfamiliar with your business and tax affairs);

Which option is correct for me?

For further details about the cover offered and annual costs, please navigate to the correct page, as follows:

  • If you run a business as a company, partnership or sole trader, click here
  • If you do not run a business and submit a personal self assessment Tax Return only, click here

Business Scheme

Once begun, HM Revenue & Custom's (HMRC) enquiries may be lengthy & complex.

We will, of course, do our utmost to ensure the best outcome for you, but even if the result is that no additional tax is payable, you will still have to cover the professional costs incurred in handling the matter. These can be substantial; indeed, it has been known for a client to agree to HMRC’s demands simply because of the costs involved in continuing to fight the case.
For a small annual charge, the scheme will allow you to leave the matter in our hands, without having to keep one eye on the costs.

Sole Traders

In addition to the protection relating to your business, enquiries into the remaining entries on your personal Tax Return will also be included. Therefore, if an investigation expands to include investment income or rental income on your Tax Return that is separate from your business, our fees will still be paid for under the scheme.

Partners and Directors

A similar rule applies to partners (including LLPs) and directors as for sole traders, in that all personal Tax Return entries for all partners or directors (however many) will be included under the single business subscription. Protection also extends to spouses and civil partners. 

Business Support Helpline

An additional benefit is the unlimited free access provided to a Business Support Helpline.
Qualified experienced specialists in the fields of Employment, Health & Safety and Commercial Legal matters are available to assist in these increasingly litigious areas. Your business could potentially save considerable amounts of time, expense and disruption from this service.

Costs

The annual cost (including VAT) depends on the legal status of your business and the month in which you join the Service. All clients have the same renewal date (1 December), so the cost decreases the later in the year you join. These costs are as follows:

Start After Company Partnership Sole trader
1st Dec 305.00 225.00 195.00
1st Jan 275.00 201.70 174.20
1st Feb 250.00 183.30 158.30
1st Mar 225.00 165.00 142.50
1st Apr 200.00 146.70 126.70
1st May 175.00 128.30 110.80
1st Jun 150.00 110.00 95.00
1st Jul 125.00 91.70 79.20
1st Aug 100.00 73.30 63.30
1st Sep 75.00 55.00 50.00
1st Oct 50.00 50.00 50.00

All subscriptions expire on 30 November as mentioned above, when you will be invited to renew. To proceed please contact us.

If you require further information relating to our Tax Investigation Service please contact Anthony Smith.

Private Client Scheme

The environment surrounding H M Revenue & Customs (HMRC) enquiries has changed considerably and new methods and increased powers mean HMRC are more determined to claw back money from tax payers. The discovery of a simple, unintentional error causing an underpayment of tax may lead to you paying HMRC large penalties as well as repaying all the tax you are deemed to owe.

Overview

If you are chosen for an investigation, we will do our utmost to ensure that the outcome is as favourable for you as it can be. In most cases, we will be able to reach a settlement with HMRC that is considerably lower than their original demand; in some cases we can convince them to withdraw their claim altogether.

However, this can take a considerable amount of time and, even if no additional tax or penalty payment is due, we will still have to charge you for the professional fees incurred in dealing with HMRC on your behalf; such fees frequently amount to hundreds of pounds.

Another benefit of our Service is that you will continue to deal with us, the accountants who know you, and we will therefore be able to work on your case for as long as it takes to resolve the situation, up to a limit of £100,000. There is also no excess to pay.

Cost

The annual cost (including VAT) depends on the month in which you join the Service. All clients have the same renewal date (1 December), so the premium decreases the later in the year you join (subject to a minimum charge). These costs are as follows:

Start After Premium
1st Dec 80.00
1st Jan 70.60
1st Feb 64.20
1st Mar 57.80
1st Apr 51.30
1st May 44.90
1st Jun onwards 40.00

All subscriptions expire on 30 November when you will be invited to renew. To proceed please contact us.

If you require further information relating to our Tax Investigation Service please contact Anthony Smith.

Please note that if you run a business (as a sole trader, partner or director), it is more than likely that your personal Tax Return will be covered under the business service.

Resources & FAQ's

Downloads

Some additional resources can be downloaded here as PDF documents.
If you are having trouble viewing these sheets, please contact us and we will happily send you hard copies.

Introductory leaflet

Summary of the Service

HR Support leaflet

 

Frequently Asked Questions

Some questions from clients recur on a frequent basis, and we have listed these below. We will add to this list over time.

How are business clients and private clients defined?

Business clients

  • an incorporated business
  • a partnership (including limited liability partnerships)
  • an individual who is required to complete the self employment pages of a Tax Return and/or
  • an individual with income from Furnished Holiday Lets
  • an individual who completes the Lloyd's Underwriters pages of a Tax Return
  • an unincorporated trust as regards its trading activities
  • an unincorporated charity as regards its trading activities
  • an unincorporated non-profit organisation as regards its trading activities.

Private Clients

  • an individual not falling within the definition of a business client
  • a trust with no trading income
  • a charity with no trading income
  • a non-profit organisation as regards its non trading activities.
I have a group of companies - what cover do I need?

Protection needs to be arranged for each entity completing and filing a tax return exposed to enquiry or intervention. For example, a group made up of a parent company and three subsidiaries, all of which complete a tax return, would need to have cover in place for all four of them individually to be fully protected.

My business has annual turnover in excess of £10 million. What should I do?

Larger businesses can still be covered within the Service, but you will need to contact us for a quotation.

I am already covered by my FSB membership (or similar) for tax enquiries, is this sufficient?

We recommend that you check that your cover is adequate to meet your needs as we have experienced that this inclusive type of cover provides 'low cost, low level' protection.

For instance, we have found such cover excludes some of HMRC's new powers, may include an excess payment, and most importantly will not allow Humphrey & Co to defend you (they will use an in-house team). This team will not have the same level of knowledge about how you and your business operate and have been known to settle early to minimise their costs. In contrast, we continue to fight relentlessly for our clients until we are 100% satisfied we have reached the best solution (as all of our fees are covered).

If appropriate, we would be happy to compare any third party policy to ours to demonstrate the key differences, please just contact us.

I am a company director and both myself and my wife complete Tax Returns. Are they both included under the main business policy?

Providing we complete both the Tax Returns and are the appointed tax agents, then yes they are included. This equally applies to partnerships and their partners/spouses returns too.

Is there any limit to the number of partners/directors/spouses that can be included with the business?

No, provided we prepare the Tax Returns there is no limit. Company Secretaries' returns are also covered under a corporate subscription.

Is the cost of the service allowable for tax?

All VAT Registered clients can claim back the VAT element (a VAT receipt will be issued for this purpose), but regrettably the remaining cost is not allowable for income/corporation tax purposes under existing legislation.

What type of policy should an LLP have?

A limited company policy.

Can non-resident landlords join the scheme?

The policy will cover non-resident landlords assuming they are properly registered under the NRL Scheme and complete a UK Tax Return.

I am non-domiciled, is that a problem?

No.

Are businesses with foreign offices, income etc. eligible for cover?

Yes providing they complete a UK Tax Return. The scheme will only cover an enquiry/visit relating to the entities’ UK tax affairs.

Can non-UK residents who earn UK income and complete UK tax returns be included?

Yes – although the scheme will only cover an enquiry relating to the individual’s UK tax affairs.

My Tax Return was submitted after the deadline, is an enquiry still included?

Cover will still be in force providing the Tax Return, or the amended Tax Return, is submitted within 90 days of the statutory filing date. Submissions after this period will not be included unless HMRC accept the reason for the delay.

My business has recently incorporated. What policy(s) do I need for continuous protection?

If you are trading as a sole trader (or partnership), have joined the scheme and subsequently incorporate to a limited company, you potentially have two separate businesses to include.

However, there is no requirement to have two separate services running simultaneously to keep full protection in place.

At the renewal following incorporation, you will need to upgrade to the company scheme. If you do this we will ensure protection also remains in place for the sole trader (or partnership) in run-off, until the normal enquiry window closes following submission of the final tax return, at no extra cost.

We will also ensure the newly formed company is included between incorporation and the renewal date where the upgrade is taken.

What happens when I become a client or cease to be a client of Humphrey & Co?

In order to enjoy the benefits of the service you would need to be a client of the firm at the date of any intervention by HMRC. So, for example, if you transfer your affairs to another practice, and then receive an enquiry notice a week later concerning a Tax Return we prepared for you, this would be excluded from the service.

Equally, after you have become a client of the firm, if you receive an enquiry concerning a Tax Return submitted by our predecessors, this would be included in the Tax Investigation Service.

Refunds on cancelled policies will be subject to an administration fee equivalent to the minimum charge on a private client policy.

What happens if I die?

When a client on the Scheme passes away, if they have subscribed under their own name, the protection continues until the normal expiry date, effectively passing to the Executors who will administer any final self-assessment Tax Returns required.

If the Executors wish to include any Trust and Estate Tax Returns, they would require a separate subscription.

What if I receive an enquiry regarding the Job Retention Scheme?

The Tax Investigation Service fee protection insurance policy includes any fees relating to Job Retention Scheme (JRS) enquiries and/or visits.

Response & Contact

If you would like to enjoy the peace of mind offered by the Tax Investigation Service, please complete the form below and we will then write to the address specified or email you to obtain final details and payment.

We accept payment by Direct Debit only. If you do not have a suitable bank account for this purpose and wish to pay by another method, please let us know in the additional information box below. Information about costs can be found on the business or private client sections above. The service will not commence until we receive your payment in full.

For further information about the Service, or to contact us for any other reason, please email us. Alternatively, please contact Julie Macefield at our Eastbourne office for queries regarding the Scheme’s administration, or contact the partner who normally deals with your affairs for cover related queries.

 

Response Form

(new applications only - not renewals)

Please include a note below if more than one is required

e.g. If a company service is required

Required only if the Email option is selected below

Who deals with your affairs