Peace of mind in 2023 when it comes to your tax affairs - we are concerned that you may not be currently protected
With the 31st January self-assessment deadline for filing returns having just come and gone, tax matters are probably very much still on the minds of many. Perhaps less so is the potential impact that a tax enquiry or investigation might have on us as an individual or on our business.
Whilst we all want to ensure our affairs are in the best order, there is a real risk that the Revenue can instigate an investigation or enquiry.
We are therefore concerned that some clients may not be covered by our Tax Enquiry Fee Protection Service for 2022-23.
If you haven’t subscribed or re-subscribed to our Tax Enquiry Fee Protection Service, then in the event you are subjected to an HMRC enquiry our normal fees will not provide for dealing with the matter on your behalf.
HMRC Tax enquiry and investigation activity
From a claims perspective, our insurer has seen about a 60% increase in HMRC activity over the last few months. The Coronavirus Job Retention Scheme was, understandably, the main type of enquiry. However, since furlough has now ceased there has been a large increase in VAT enquiries being opened. There has also been an increase in corporation tax and income tax enquiries.
A record amount was raised through IHT investigations in the year to March 2022, up 28% on the previous 12 months. Wealthy individuals are being targeted by HMRC, defined as those with an income over £200,000 or assets of over £2m. Last year, HMRC opened 4,258 enquires into families who owed IHT, up from 3,574 the year before, when lockdown restrictions affected inspectors' ability to carry out investigations.
As part of its ongoing focus on cracking down on tax evasion, HMRC recently began to ramp up investigations after delays caused by the pandemic.
We therefore strongly recommend that clients consider taking out cover to ensure that they have peace of mind should they or their business be the subject of an enquiry. With tight budgets and pressures on cost, few will welcome any additional unbudgeted professional fees to deal with an investigation.
For further information and/or a quotation for cover please speak to your usual Streets contact or email feeprotection@streetsweb.co.uk
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