A4G Tax Protection Scheme

An enquiry into your business can cause huge disturbance and possibly lead to loss of income as well as being extremely time consuming and costly.

If an inspector believes he has any evidence at all that demonstrates that you have underpaid your tax bill, then it is possible that you will be required to pay the additional tax unless you have the evidence to demonstrate otherwise, as well as the costs incurred by your accountant dealing with the enquiry.

The A4G tax protection scheme covers accountancy fees up to £75,000 for work that arises in the event of a full enquiry and many types of aspect enquiries. By joining the scheme you will have peace of mind in the event of a HM Revenue and Customs enquiry and will be able to draw on the experience of specialists in the event of the enquiry covering unusual issues.

If you are a sole trader then the subscription includes both your business and you personally, however for companies and partnerships (including LLP’s) the subscription is for the business only and the directors/partners will need to take out a separate policy.

The subscription is a one off annual payment, running from 1st April to 31st March. It is possible to join the scheme later in the year and the cost will be pro-rata.

If you require any further information, please contact our Tax Protection specialist on (01474) 853 856.

What is the difference between an aspect and a full enquiry?

There are two types of enquiry launched by the HM Revenue and Customs. In most cases the enquiry is usually an aspect rather than a full one, but what is the difference?

Aspect Enquiry

An aspect enquiry is about a limited number of issues, sometimes only one item. This could be because HMRC think that a particular expense category is high and they wish to request a breakdown.

Full Enquiry

A full enquiry is an in-depth examination into all aspects of your tax return. It can be on your return, your company’s return or both. All supporting accounts and records will be required for the enquiry, which can take between 6 months and four years, although enquiries lasting over 18 months are rare.

A full enquiry can be random but may be triggered by some external information received by HM Revenue and Customs. Disgruntled ex-spouses or employees are sometimes a cause although HM Revenue and Customs will never disclose why the full enquiry was started. Full enquiries can also be very costly in terms of accountancy fees.

Case Studies

Case One

An enquiry was opened into a company’s tax returns, as HMRC believed the number of associated companies declared was incorrect for the last two years. The issue centred around whether a foreign company was under the control of the same person that controlled the UK company.

The company had thankfully subscribed to the tax protection scheme and with our expert assistance over many months and several meetings, it was proved that the tax returns were correct and an extra tax bill of £30,000 was avoided. Our accountancy fees in dealing with this case would have cost the company a further £5,500 if they hadn’t subscribed to the scheme.

Case Two

HM Revenue and Customs alleged that a jeweller had under-declared VAT based on the evidence of a supplier who claimed to have sold gold to him.

HM Revenue and Customs take any information received from a third party very seriously and launched a full VAT enquiry.

As the jeweller had previously subscribed to the tax protection scheme, we were able to fight his case at no extra cost to him.

The enquiry was eventually withdrawn after it was demonstrated that the VAT had been declared correctly and the jeweller received a reimbursement of all costs and interest lost through the enquiry.

Contact me today!

Josh Curties

BA (Hons) FCA

Partner & Principal Adviser

01474 853856

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