Professional Fee Insurance

What is the scheme?

We operate a group insurance scheme with Abbey Tax Protection Limited to insure our business clients against the costs incurred in dealing with an Inland Revenue or Customs & Excise investigation. By joining the scheme you will benefit from significant savings compare with arranging your own insurance separately. The policy covers you for the amount of our costs in dealing with the investigation on your behalf.


Why should I take out the cover?

The threat of random investigations by the Inspector of Taxes should be reason enough! However, we have identified a few facts which we believe you should seriously consider:

  • “Revenue plans huge increase in tax checks” – source Sunday Times, 28th November 1999; the Inland Revenue are increasing the number of Full Enquiry investigations by 50%
  • “VAT men to focus on company audits” - source Daily Telegraph, 6th December 1999; there has been a significant increase in revenue generated by visits by Customs & Excise, a staggering £992 million last year
  • "New revenue powers on fraud” – source Financial Times, 1st December 1999
  • “Taxman suffers as firms take out inquiry insurance” – source Guardian, 18th April 2000
  • “Revenue goes to war on the black economy” – source The Times September 30th 2000
  • “Tax officers may pursue those [taxpayers]…and coerce them into settling” – source daily Telegraph January 2001
  • £880 million extra has been invested in additional staff through the ‘spend to save’ initiative.
  • The average length of an investigation is 18 months.
  • In 1999/2000 the Inland Revenue collected over £5.4billion in additional tax liabilities from investigations and compliance work, a 36% increase over 1998/1999
  • The yield from Income Tax Self Assessment Full Enquiries into businesses increased by over 300% from 1998/1999 to 1999/2000
  • The yield from Enquiries into personal taxpayers Self Assessment Returns increased by over 200% from 1998/1999 to 1999/2000
  • The Inspector of Taxes is no longer obliged to give a reason for investigation
  • A recent survey shows that clients who take out Fee Protection Insurance have a considerably better result following investigation than “unprotected” clients
  • All employers are likely to have an Audit visit every 5 years

Cover Summary:

  1. Income Tax Self Assessment Full Enquiries
    The “trigger point” is the issue of the S9A or S12AC TMA 70 Notice by the Inspector of Taxes together with a request to examine all of the business books and records.
  2. Corporation Tax Self Assessment Full Enquiries
    The “trigger point” is the issue of the Notice under S24 (1) Schedule 18 Finance Act 1998 together with a request to examine all of the business books and records.
  3. Corporation Tax Accounts Investigations
    The trigger point is the issue of IR72 and Code of Practice 2 leaflet and/or a request to examine all of the business books and records.
  4. Employer Compliance Disputes
    The cover is in respect of PAYE, P11D and NIC disputes and the trigger point is the issue of a letter, assessment or notice by the Inland Revenue, following an Audit visit, providing there is a prospect of disputing the alleged liabilities.
  5. HM Customs & Excise VAT Disputes
    The trigger point is the issue of a written decision , assessment , or statement of alleged arrears by HM Customs & Excise, following a Control visit, providing there is a prospect of disputing the alleged VAT liabilities.
  6. IR35 Disputes
    Cover is also available where the Inland Revenue are disputing the IR35 declaration. However, there must be a written Contract for Services in respect of the liabilities which are being disputed. The Contract must also have been strictly followed and there must be a reasonable prospect of successfully contesting the Revenue’s allegations.


The main exclusions are as follows:

  • Claims arising where the annual Returns/accounts are submitted “late”; ie outside the time parameters set out in Taxes Management Act 1970.
  • Special Compliance Office, Special Investigations Section and HM Customs & Excise Investigations Division cases.
  • Fees incurred prior to the written acceptance of a claim
  • Existing investigations and disputes at the time the insurance is taken out.
  • Attendance at routine VAT and Employer Compliance visits.
  • “Aspect” Enquiries where the Inspector of Taxes is merely raising a routine enquiry into a part of the Self Assessment Return.