Fee protection insurance
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Professional fees insurance
Professional fees insurance has been popular since self-assessment was introduced. Self-assessment heralded the start of the formal enquiry regime, and businesses soon emerged which provided insurance covering the professional fees associated with such enquiries.
At first it was commonplace for policies to cover only full enquiries (a full books and records review), but not enquiries into one or more specific aspects of a tax return. Less common investigative tools, such as Code of Practice 8 investigations (cases where fraud is not suspected but large amounts of tax may be at stake, typically covering avoidance schemes) were not covered.
Nowadays, professional fees insurance is much more sophisticated. Different terms can be discussed with the various providers, but typically some or all of the following types of enquiry might be covered.
Full enquiries
These involve an extensive examination of the tax position of an individual, partnership or company. HMRC will consider all aspects of the self-assessment return and undertake a comprehensive review of all books and records underlying the entries made on the return.
Aspect
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