July 27, 2022

Fee Protection Insurance - Your Questions Answered

What is it?

Fee Protection Insurance covers accountancy fees that are charged when you ask us to deal with enquiries that HMRC raise into your affairs.  

HMRC enquiries are better targeted today than ever before, and they are being undertaken with an unprecedented level of detail and persistence.  

Why do I need it?

If you are subject to an HMRC enquiry you can incur thousands of pounds in accountancy fees, even if at the conclusion it is found that there is no additional tax to pay.

For a modest premium, Fee Protection Insurance covers the accountancy fees incurred in the event of an enquiry, providing you with the peace of mind of knowing that your accountant’s fees are covered and you have the resource to provide a strong defence.

Why would HMRC open an enquiry?

HMRC enquiries can be completely random, meaning that any tax return can be queried by HMRC regardless of size or complexity.  These ‘random enquiries’ can be some of the most expensive enquiries that HMRC open because they are not usually looking for something specific.  For a tax return, they would be looking to confirm that the entire return is accurate and so could look to confirm that every entry on the return is reasonable and justifiable.  

Other enquiries can be into a certain ‘aspect’ of a document.  It might be the case that a figure does not tie up with the information that HMRC have on file.  These can still take a good amount of time to deal with depending on the aspect in question.  

HMRC are also now checking the eligibility of recent support scheme claimants along with the amounts claimed.  

Can Holly Lodge provide me with FPI cover?

Yes, we can. All of our clients have the option to take out FPI cover with us for an annual premium. We can advise you on the correct type and level of cover for your circumstances and also offer package options for those with multiple business interests.

Fee Protection Insurance enables us to help you, in the unfortunate case that HMRC open an enquiry, without worrying about the cost.  The insurance delivers comprehensive protection against most of the potential fees arising from professional representation in the event of an HMRC enquiry.

The cover includes any investigations into Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS) payments, as well as Gift Aid cover and Stamp Duty Land Tax (SDLT) and its regional equivalents.  Claims made and grants paid under the Covid-19 business support schemes are also covered subject to the policy’s terms and conditions.  

Coming from a legal background and with many years of experience in business administration, Jo works behind the scenes as Holly Lodge's Practice Manager. Jo handles Holly Lodge’s legal and compliance requirements, credit control and its social media/online presence.

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