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Why small businesses need tax protection

  • Blog
  • 28 November 2015

No matter the size of your business, once a year you need to deal with the tax man. You, and your accountant, if you have one, spend a lot of time getting all your paperwork in order, dotting i's and crossing t's to make sure you stay on the right side of HMRC.

Unfortunately, submitting your tax return is not necessarily always the end of the story. An HMRC investigation can happen to anyone, regardless of how thorough you are in your tax return. Investigations are routine for anyone registered for VAT or who has employees paid though PAYE, and as a small business you can expect an audit every 5 years on average.

Why small businesses need tax protection

 The likelihood of a more serious investigation can increase based on several factors:

  • Abnormally high costs compared to other businesses in your industry
  • You file your tax return late
  • Inconsistencies between returns
  • Offshore bank accounts
  • You are in a high-risk industry that routinely takes cash payments

For a tax audit, you can expect a visit and HMRC will want to check your records. For an HMRC investigation, you will receive a letter asking for information. The letter will tell you whether a particular aspect or your full tax return is being investigated. The tax enquiry must usually start within 12 months after you filed the return.

A tax investigation can take several months, possibly longer, and can be complex. The additional stress of dealing with an HMRC investigation makes it worth taking specialist advice. There may be several requests for more information, including documents. Having tax protection service such as FSB Tax Investigation Protection can significantly reduce the stress and hassle of dealing with the investigation. Advice on how to deal with requests for information and documents, and dealing with as much as possible in writing will add additional protection.

A tax investigation from HMRC need not cause your business to grind to a halt. Having adequate HMRC investigation insurance can ease the burden and get you back to doing what you do best, running your business.

FSB Tax Protection Key Features

  • Free tax advice helpline manned by Revenue-trained specialists.
  • Former tax inspectors to represent you during any HMRC investigation who will liaise directly with your accountant.
  • Tax investigation insurance - any fees that the FSB agree with your accountant are covered in your policy.
  • IR35 legislation is covered
  • Tax / VAT / Aspect protection.
  • Cover up to £50,000.

FSB Tax Investigation Protection from FSB

Tax advice & investigation protection from the FSB

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