Talk

Advanced search

Insurance against Inland Revenue inspections - yay or nay?

(13 Posts)
FeelingLucky Thu 09-Oct-08 14:55:17

My accountant has said I can insure to pay for extra work involved in the event of an Inland Revenue inspection.
This is going to cost £115pa plus VAT.

Is it worth it?

Our Ltd Company is just DH and I - we freelance in the same field, keep a record of our expenses, mileage, etc. pay a cheque in about every week, get a salary and dividends.
How much extra work can it be if there is an inspection?

whomovedmychocolate Thu 09-Oct-08 14:56:38

Don't do it. Your likelihood of being audited is so small and with your level of business it's not a biggie anyway. Just make sure you keep everything.

BigTeuchLittleTeuch Thu 09-Oct-08 14:57:22

Our accountant hasn't charged us for the extra work!

flowerybeanbag Thu 09-Oct-08 14:59:06

Our accountant said the chances of anything like that happening are minute. I certainly wouldn't waste money insuring against it, that sounds like a bit of a swizz to me.

Just keep good records, you'll be fine.

FeelingLucky Thu 09-Oct-08 15:19:52

Thanks for replies everyone.
Had a feeling it might not be worth it ...

Seem to spend all my time posting about accountancy issues and dealing with all that, rushing off to collect DD from nursery now, it's a wonder I have any time left to actually earn some money grin

thanks again all!

janinlondon Thu 09-Oct-08 15:26:52

Ours tried this one on - for a much higher sum. We left.

whomovedmychocolate Thu 09-Oct-08 15:46:46

Feelinglucky - your accountant sounds like a bit of a gimp! Did he come with a recommendation or did you pick him out of the cowboy handbook yourself? wink

FeelingLucky Thu 09-Oct-08 18:57:01

I'm afraid he came with a recommendation.
I should tell you about our last accountant - charged us DOUBLE the rate of this one, which I supposed paid for their very plush offices off Piccadilly Circus.

pickie Thu 09-Oct-08 19:06:54

Join the FSB for £100 a year and get the IR inspection covered (for free) and much more (including 24 hr legal helpline)

FeelingLucky Thu 09-Oct-08 19:09:41

Is that Federation of Small Businesses?
If so, thanks for the tip Pickie smile

ChasingSquirrels Thu 09-Oct-08 19:15:19

I am an accountant, we offers this to client's.
I would be in two minds whether to buy it personally - on one hand the fees involved in a full investigation can run into thousands, on the other hand the chances of getting picked for a full investigation are relatively small.
I have clients where the costs of a full investigation, where nothing significant at all has been found (HMRC won't give in without finding something so you end up conceeding the v small points to get the investigation closed), and the costs have still run into tens of thousands, and the investigations have dragged on well over a year. These however are NOT usually this type of business.
If you think about costs, manager chargeout rates (outside London) will be £100-£200, partners will be £200-£500. So even an hour of someones time (and an investigation takes much longer than an hour) is more than the insurance fee.

People often confuse an aspect enquiry (where HMRC asks about 1 or 2 items in the tax comps) with a full enquiry (where they take the whole thing to bits).
Aspect enquiries are much, much more common (and often aren't covered by the insurance - wheck the small print) and far cheaper to deal with, they are often dealt with by a single letter passing over the relevant facts.

ChasingSquirrels Thu 09-Oct-08 19:15:55

we offer this not offers - I changed the sentance and didn't re-read.

pickie Thu 09-Oct-08 19:16:27

Yes that's the one. They are very good, I have only used them for a few legal queries (and also to check something my accountant said) and with those go the fee was many times over covered!

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now