If you are concerned about how much it will cost to defend and HMRC tax inquiry even if you have done everything right, then there is a solution. A Tax inquiry is what HMRC calls and investigation as it is an inquiry into your tax return/payroll/VAT return/corporation tax return.

Similar to most accountancy practices I provide 'Tax Investigation Insurance' which covers all my costs in the event of an inquiry. Tax inquiries can last many months and can be very time consuming. Each letter we receive we are given 28-days to reply and they may take that again to reply to us. They can be very stressful even when everything is above board.

As an added bonus you have access to a free legal helpline covering Employment law (HR), Health & Safety, Commercial Law.

TRAP: Some clients have cover elsewhere e.g. through the Federation of Small Business (FSB) or their bank, but these bolt-on services are very restrictive and cover only a fraction of standard any accountancy practice policy.

For further information please visit my dedicated page. http://www.accountantuk.uk/services/tax-investigation-insurance/

My policy renews every October 1st. Prorate cover is available if joining mid-year.