TaxWise Plus

What does it cover?

Fee Protection Insurance shouldn't be a difficult product for accountants to understand, after all it covers HMRC compliance checks, and accountants know all about HMRC compliance checks. However historically standard Fee Protection Insurance Policies have caused confusion and misunderstanding, in terms of where the cover starts and where the cover finishes. When we developed Taxwise Plus we saw it as an opportunity to tackle this ambiguity. Taxwise Plus covers everything, unless it is specifically excluded, a simple message which leaves no room for confusion or misunderstanding. However despite this, some of the misunderstandings of the past continue to linger, often arising when accountants look to compare Taxwise Plus to other products in the market. Below we have looked to once and for all dispel any misunderstanding or confusion in respect of the key areas of cover.

Traditional Fee Protection Insurance Policies have limited cover to an enquiry opened under a notice, which makes reference to the relevant statute (either Section 9A or Section 12AC of the Taxes Management Act 1970 or Schedule 18, paragraph 24 of the Finance Act 1998). Therefore should HMRC write to a taxpayer and request information without making reference to the relevant statute, the Policy would not cover fees incurred responding. Amongst other things this clearly rules out fees incurred responding to an intervention, which are often informal notices, without reference to statute.

When detailing what is covered, Taxwise Plus is far less prescriptive than traditional Fee Protection Insurance Policies, it quite simply covers fees incurred responding to any correspondence from HMRC or attending any meeting with HMRC. This all embracing insuring clause covers everything, with the things you would not expect to be covered by a Fee Protection Insurance Policy removed by exclusion e.g. preparation of a tax return. Broadening the Policy scope in this way automatically includes cover for fees incurred responding to an intervention, along with any other SchedUle 36 approach and indeed any other queries raised by HMRC. In the last 6 months Interventions have accounted for 7% of all claims, therefore this increase in the scope of cover is proving to be invaluable.

From a VAT and PAYE point of view, traditional Fee Protection Insurance Policies have limited cover to a dispute follOWing the Compliance Review. Therefore the Policy will not cover fees incurred briefing the client on what to expect. attending an opening or closing meeting with HMRC on the day of the Compliance Review, proViding further information (which was not available on the day) follOWing the compliance review. In fact traditional Policies only react after all of this, if HMRC contend that additional tax is due (from that point onwards), and then only if the taxpayer and their accountant want to dispute the contention.

Taxwise Plus covers fees incurred attending any meeting with HMRC and responding to any correspondence from HMRC. It therefore covers fees incurred in respect of a PAYE or VAT compliance visit from the outset and throughout regardless of whether there is a dispute. Our Policy and marketing literature does not need to distinguish between cover for the Compliance Review and pre-dispute cover and post dispute cover, as it quite simply covers all of this. With 19% of all claims relating to a PAYE or VAT dispute, once again this extended cover is proving to be invaluable.

If a client is subject to a cross tax review, which combines the above elements into a single compliance check (a single check dealing with Income Taxi Corporation Tax and VAT and PAYE), Taxwise Plus will cover all fees incurred. in respect of all areas, from the outset and regardless of whether there is a dispute.

Quite simply whatever guise an HMRC approach takes, Taxwise Plus will cover it, it does not distinguish between different approaches and therefore by implication covers all approaches.

We are committed to building and maintaining long term relationships with our clients. This is only possible if our clients feel they have been treated fairly, and an insurance Policy that reacts as our clients expects is fundamental in this respect. Taxwise Plus is designed to react as you would expect.