Each year HM Revenue & Customs (HMRC) will undertake a number of tax enquiries into individuals and businesses in order to ensure that they have paid the right amount of tax.
Since 2010 HMRC have strengthened their approach from this point of view and the general trend has been a year-on-year increase in the number of tax enquiries opened.
The last few years have been unprecedented in so many ways and, particularly during the Covid-19 pandemic, we saw HMRC become preoccupied with the provision of the government’s support packages, taking a ‘pay now, check later’ approach so that this urgent support could be delivered quickly.
What was clear was that this always represented the calm before the storm, and it was obvious that there would eventually be pressure on HMRC to generate more tax in order to fund the enormous spending through this period, as well as a need to check that the measures put in place to support the economy had not been abused.
The provider of our Tax Fee Protection Scheme, which covers professional fees we incur dealing with such HMRC enquiries, has seen clear evidence of this. The number of claims from tax enquiries increased throughout 2022, especially in the last quarter of the year, and this pattern is continuing into 2023, making the protection afforded by our Tax Fee Protection Scheme more valuable than ever before.
For our clients, our Tax Fee Protection scheme renews in April and if you are not currently protected by our scheme you will have an opportunity to purchase this protection then.
If you are currently protected by the scheme, then we strongly recommend that you take the opportunity to renew this protection when the time comes.