Skip To The Main Content

How do I protect my business during a tax investigation?

  • Blog
  • 14 November 2017

A tax investigation can be a trying time for a business. Responding to requests from HMRC and liaising with accountants can be highly disruptive and keep you from focusing on the important task of running your business.

So how do you ensure your business keeps running and minimise the disruptions you might face?

How do I protect my business during a tax investigation?

Plan ahead

One way to protect the general day-to-day running of your business during a tax investigation is to include the possibility of one happening in your business continuity plan.

If you’re unavailable to focus on your business during an investigation because of needing to organise accountants, VAT specialists and paperwork, for instance, who does responsibility fall to? Do you also have a management structure in place that will allow the business to keep running effectively without your input?

Tax investigations can be lengthy procedures, with some taking over two years to complete. While you won’t be away from your business the whole time, the extra work and interruptions during this time can be stressful. This can especially be the case if there is the chance that you might receive a hefty tax bill at the end of the process.

Record keeping

You can help ease the strain on your business by having properly organised financial records. Everything should be documented and stored so that it can be easily found. This way, if you need to provide specific details about transactions or finances, they can be easily located and provided to HMRC to help speed up the tax investigation process.

Doing this can also help to protect you from potential investigations, as staying organised can help avoid rushing to fill in a tax return and making mistakes. Accuracy is key and errors can often prompt an investigation.

Insurance

Tax investigations have a range of costs associated with them. Not only do you potentially have to pay HMRC, in terms of backdated tax and possible fines, but also fees for accountants and other financial specialists.

These additional fees can often be higher than the amount of tax you need to pay as a result of the investigation. Sometimes, this can cause serious financial difficulties for a business, which is why tax investigation insurance is a good idea.

The insurance can help to cover these fees and lessen the financial blow to your business. This could allow you to continue operating and get the running of your business back to normal, once an investigation has been resolved.

How FSB can help with tax investigations

FSB provides automatic access to tax investigation advice and insurance as part of its Business Essentials package. This helps to protect you and your business if you’re subjected to an investigation by HMRC. It can cover you in the event of a routine investigation, or if a taxation issue is taken further.

The service provides access to a number of benefits, including:

  • Cover up to £100,000 per individual claim
  • Representation from former tax investigators, who will liaise directly with your accountant
  • A tax advice helpline
  • Tax investigation insurance – the policy covers any fees we’ve agreed with your accountant

To learn more about tax investigation, or how our protection service can help your business, please visit the FSB Tax Investigation Protection page. Or visit our package comparison page to see our other packages and the different ways FSB could benefit your business.

FSB Tax Investigation Protection from FSB

Tax advice & investigation protection from the FSB

Find out more