Fee Protection Scheme - FAQs
Parry Hancock Fee Protection Scheme - Frequently Asked Questions
Q. I’ve got nothing to hide. Why should I join the Scheme?
You are exactly the sort of client we are trying to protect. In fact this sums up the position of all our clients.
The purpose of the protection scheme is not to cover any dodgy goings on. None of our clients has anything to hide. That is not the purpose of the Scheme.
The point is that HMRC can make an enquiry into your business and tax affairs and it can take a great deal of time, cost and effort to make them go away if for some reason they believe there is something to find when there is not. The idea behind tax investigation protection is to give you a defense against the cost of having to prove that there is nothing for HMRC to find.
Q. It costs too much. Can’t you lower the cost?
The cost is not great (see actual cost below). If you are a business client you could recoup the cost of the Scheme by using the Business Support Helpline just a couple of times.
You could save thousands of pounds, or even tens of thousands of pounds, in professional fees if you get on the wrong end of a difficult HMRC Enquiry.
We have learned from a new client that his former accountant arranged a fee protection scheme where the annual scheme fee was over triple the amount we are charging.
Ours is a premier scheme at a sensible fee.
Q. I am a new client. What if HMRC enquires into earlier years when you were not acting for me?
You will be covered if we are your Tax Return agent (business or individual) when an HMRC enquiry, review or intervention begins. It does not matter if we did not submit the Return in question. However, the Return in question must have been submitted to HMRC within the published deadlines.
Q. What sort of HMRC activity does the Scheme cover?
The Scheme covers a whole range of HMRC enquiries, reviews and interventions across the spectrum of Business and Personal Tax, VAT and PAYE. From an HMRC Full Enquiry to an informal request for information or review.
One very important feature of the Croner Taxwise Fee Protection Scheme is its underlying philosophy of Early Co-operation with HMRC.
Some schemes only cover the cost of dealing with HMRC’s formal enquiries invoked under statute. Our Scheme covers the cost of dealing with HMRC’s informal requests for information so that a speedy conclusion can be brought to HMRC’s intervention instead of ignoring the informal request and escalating the intervention to a more formal and confrontational level.
Q. I think I am already covered. Why should I join your Scheme?
That’s OK, but do please check the small print.
Membership of some bodies can sometimes include a form of Fee Protection Insurance, but please check exactly what is covered as it may not include the cover of our Fee Protection Scheme (for example does it cover HMRC informal requests for information, does it allow you to appoint us, your accountants, to do the work, does it include the support of a bank of tax enquiry specialists such as the Croner Taxwise specialist support team?)
Q. I can’t decide. What do you think?
Join the Scheme.
We have done the due diligence. This is a good Scheme.
Q .I haven’t completed my first year of trading yet. Should I join now or wait until later?
HMRC have new powers. They can now request information about your business records at any time. They don’t have to wait until after you have submitted your annual accounts.
When you join you will have access to the Business Support Helpline - which could be invaluable to your growing business.
You should join now.
Q. My business ceased a few months ago. Surely there is no need for me to join the Scheme now?
Supposing you ceased your self employed trade in the summer of 2014.
Your self-employed trading figures to cessation will be included in your 2014/15 Tax Return.
The deadline for submitting your 2014/15 Return is 31 January 2016.
HMRC then have until 31 January 2017 to announce their intention to formally enquire into your 2014/15 Return.
Therefore you should join, and remain in, the Scheme until at least January 2017.
Similar principles apply to limited companies. HMRC’s right to launch an Enquiry extends years after the business ceases to trade.
Q. What about cover for directors and partners of the business?
If the business is covered then so are the personal Tax Returns of the directors or partners of the business.
However, the directors or partners would have to take out separate cover for their personal Tax Returns if they were required to complete the Self-Employment pages of their personal Returns or if they have gross letting income in excess of £50,000.
Q. I was investigated a couple of years ago. Surely this means I can relax and take the risk that HMRC won’t return?
Quite the contrary. Whatever reason HMRC had for looking onto your affairs may still (in their minds) be there. We have a client with a self-employed business making modest profits who has been the subject of HMRC Enquiries in the 1990’s, and again in 2001/02 and then again in a double-whammy for the 2005/06 and 2006/07 tax years.
We have witnessed how HMRC can return to a client where they didn’t get “a result” first time around and for some reason are convinced there is something to find.
Q. There is absolutely no reason that HMRC could possibly have for investigating my affairs. Surely I should be able to just relax and ignore this?
HMRC will never say why a taxpayer is selected for checking/enquiry.
The business results could show up some statistical anomaly. Land registry could show an undisclosed transaction that needs explaining. The banks could reveal details of accounts on which interest has not been declared........
Or perhaps someone who knows you could have phoned HMRC and reported you..... A neighbour who spots a Rolls Royce in your driveway, a disgruntled employee, a supplier, a customer, a competitor...... Who knows?
The danger is that HMRC can start with an assumption that “there is something going on” when there isn’t. We have experience of this. We are currently dealing with an Enquiry where we have been in dispute with HMRC for over 6 years because we disagree with their “findings” and the case is now heading towards a Tribunal Hearing.
Or...you could just be subjected to one of HMRC’s random checks.
Q. Is the Croner Taxwise Fee Protection Scheme recommended by any professional body?
The Institute of Chartered Accountants in England & Wales (“ICAEW”) has awarded “partner” status to various providers of the products and services available to Chartered Accountants. In each case ICAEW has researched the market and chosen the provider they think offers the best value for money in their product range.
In Croner Taxwise has been chosen by ICAEW as its exclusive partner for fee protection.
Q. How does the Business Support Helpline work in practice?
When your business joins the Scheme we will give you the Helpline number. We will also advise you of the Scheme number. When you need advice you simply phone the Helpline and quote our Scheme number.
You will have access to advice on such things as:
Employment and personnel, including
- disciplining an employee
- gross misconduct
- Changes in terms of contract
- National Minimum wage
Health & Safety, including
- hazardous substances
- risk assessments
- Manual handling
Commercial and legal issues, including
- landlord and tenancy
- company law
- partnership law
- copyright and patent
- debt collection
Q. What does it cost?
The annual subscription is on a sliding scale, based on the size of the business. The minimum subscription is below £100 plus VAT per annum for a Business client. The minimum subscription is below £30 plus VAT per annum for a Tax Return Only client.
Q. I’ve heard that some Accountants don’t charge for this?
The cost will be recovered somewhere in the Accountant’s fee structure, either visible or invisible.
Our policy is that all clients should be included in this Sceme