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I came across a new thought (thrown at me during idle conversation) this week...
Apparently, if the tax man has to come to inspect and verify your books - following submission of your annual return - s/he charges you for the time spent going through those books. All of it!
Now, I can't imagine that is a cheap exercise; and the hourly rate won't be exciting either!
However, this thought that was thrown at me talked about an insurance policy that you can buy that will cover you for payments to the tax man incurred during a check/examination of one's books. I have never actually come across this; so I was told my accountant would know about them.
The down side... I do not have an accountant! I have developed a spreadsheet program that does all my annual accounts, and most of the calculations that are required on the dreaded SE tax return. This has managed to keep me in good stead for many years now. And I've never had the dreaded phone call asking me to explain (so far). But one day...?
So, has anyone come across this form of insurance? Can you recommend a policy/broker/whatever? I would sooner be safe than sorry.
Thanks for that link. It is certainly the sort of thing I'm looking for. I just never thought of looking for it as a 'defence' system; so my searching had all been for naught up until now!
Temporarily 'unticked' to keep the thread live and looking - but it looks good so far.
If taking out such a Policy, I would carefully read the T&Cs and I would expect them to cover their risks fairly comprehensively.
For example: I would expect them to limit the cover for Self-Certified Accounts.
When I have some sensible time to investigate the T&Cs in FE's link, I shall look out for that. I would have hated to find that I would lose out on that 'loop hole'!
I wasn't aware that HMRC could charge for their time. I have trawled 'tinternet but can't find anything. What was your source for this?
I have had separate VAT and Revenue inspections (one of each) but nothing in recent years. The VAT man wrote to me and asked for some files which I sent and that was the end of that. The Revenue lady came, asked to see the books (I gave her the ring binders of invoices/receipts/cc statements and bank account statements, and showed her the excel spreadsheets) she declared herself happy and left. No bills.
My experience covers the last 25 years but I have had none since 2001/2. Never any Charges from them.
However: When such an inspection is in progress you either, have to be pretty sure that you are absolutely correct or, have your Accountant, riding shotgun on the Inspector. That could prove to be very expensive at, say, £30.00 per hour!
If you follow the link that FE gave me, there's bits about it in there.
Like wee eddie, I've gone years without a dreaded visit - and I hope it continues that way! However, when it was pointed out to me that they DO charge for their time, I did end up wondering what colour adrenaline is!
And now, until I have time to investigate the given link deeper, I'm still wondering about adrenaline coz I do actually do my own!
Following your thoughts, I emailed the company to check whether 'self-certified' accountancy is covered in their policy. This morning, I received the following clarification...
Dear *Chris the Ancient*,
Thank you for your email enquiry. there is no requirement under the policy for your tax and VAT returns to have been produced by a professional. However, I would encourage you to read the exclusions set out in the Cover Summary and Specimen Policy at click here What does Tax Defence Cover. In particular I would draw your attention to the requirement to submit annual returns within the statutory time parameters (i.e. "On time").
Should you be subject to an investigation which is covered by the policy, the underwriters would appoint a professional adviser to assist you. I should also point out, that your own time costs in dealing with an investigation are not covered.
Could I also point out whilst writing that, if you would like to apply for cover, you should complete the Business application form if you would like your business earnings covered and then add the optional personal cover if appropriate.
I hope that this answers your query, but if I can be of any further help, please do not hesitate to contact me.
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