Tax Investigation Fee Protection Insurance

Depending on the contract, cover may include accountancy fees for defending a full or aspect enquiry, VAT or PAYE compliance check, employer compliance work, a dispute or appeal, and sometimes specialist support. Some policies include selected enquiries while excluding routine checks, pre-existing matters or particular taxes and activities.

The policy wording is decisive. Marketing summaries cannot replace the definitions, insured events and endorsements. Check whether the policy covers the business, directors or individuals involved and whether your chosen adviser can act at the insurer-approved rate.

Fee protection is designed around professional defence costs, not the underlying liability. Tax, National Insurance, VAT, interest, penalties, fines and the cost of preparing ordinary accounts or returns are commonly outside cover. Work needed to correct records before the insured enquiry may also be excluded.

Policies can exclude issues known before inception, late notification, claims without reasonable prospects, deliberate or fraudulent acts, criminal proceedings, offshore matters or costs incurred without consent. The exact exclusions vary, so they should never be assumed from another provider’s policy.

Compare the breadth of insured events, annual and per-claim limits, excess, adviser choice, claims control and exclusions—not only the premium. A low-cost policy can provide little value if it excludes the enquiries most relevant to the business or restricts professional rates below the cost of suitable representation.

Insurance should not replace accurate returns, good records and timely advice. When an HMRC letter arrives, notify both the adviser and provider promptly. Do not admit liability, agree a meeting or incur extensive fees solely because insurance may exist; first confirm cover and prepare the tax response on its merits.