What is Tax Investigation Insurance?

Tax Investigation Insurance is a specialised insurance policy that helps individuals and businesses cover any costs that arise from a tax investigation conducted by HMRC.

HMRC conducts these investigations as routine checks to ensure you are paying the correct amount of tax based on your business and personal income and financial records.

HMRC has the right to check your affairs at any point to make sure you’re paying the right amount of tax. If your business is selected, you’ll receive an official HMRC investigation letter or phone call in which they’ll tell you what they want to look at.

If you have a nominated tax agent, eg your accountant, they may also contact them. 

HMRC can trigger these investigations due to errors or suspicious activity, but they also select them randomly. Even if you maintain accurate records and pay your taxes on time, HMRC can still choose you for a compliance check.

HMRC may ask to review things like:

• the tax that you pay
• your business accounts and tax calculations
• your Self Assessment tax return for a given year
• your Company Tax Return
• your PAYE records if you’re an employer
• your VAT returns if you’re VAT-registered

During the investigation, a team from HMRC will audit your accounts and ask you a number of questions. They might ask to visit you in person at your home, business address or at your accountant’s office.

Tax Investigation Insurance provides peace of mind by covering the professional fees and costs associated with responding to an HMRC investigation.

This insurance covers those costs, allowing you to focus on running your business without the added stress of financial worries.