Insurance claim questions can be ongoing. However we have listed 18 of the many questions and provided the answers below which we hope you will find useful. If you have further insurance claim questions in relation to your tax fee protection insurance, please contact us.
Q1. What HMRC tax enquiries and compliance checks are covered by the Qdos Vantage policy?
A1. The professional costs of defending clients in the vast majority of HMRC enquiries and compliance checks are covered. For full details, please see our Policy Summary or our Policy Document.
Q2. On what date does a tax enquiry or compliance check start for the purposes of the policy?
A2. The date on which a letter, notice or other communication is received from HMRC indicating that an enquiry or review is to be undertaken, or any other incident occurs that might lead to a claim. Our claims team should be notified without delay if any such incident occurs within the terms of the policy, or if a potential claim is anticipated.
Q3. When is authorisation given to carry out the work?
A3. Up to £1000 of fees can be authorised on the day the incident is notified. Authorisation for further fees is given on receipt of the claim form if required. Payment of any fees initially authorised will only be made if the claim is accepted.
Q4. What if the authorised fees are insufficient?
A4. If it appears that the fees authorised are likely to be insufficient because the enquiry has not been settled within the time or costs originally envisaged, an increase in the authorised fees should be sought immediately.
Q5. Can a claim be made if a tax return is submitted late to HMRC?
A5. Yes, providing that the return in question is submitted no more than 90 days after the statutory filing date. This applies to all statutory tax returns.
Q6. What if a tax return is submitted to HMRC with provisional figures?
A6. Providing that the return is amended within the statutory time limit for an amendment, this will not affect the eligibility of a claim. Wherever possible, any provisional figures should be based on reasonable estimates to minimise the likelihood of HMRC challenging the return.
Q7. Can tax specialists be consulted by the practice when dealing with HMRC?
A7. Qdos Vantage specialists are on hand to assist at the request of the practice but external specialists may be consulted with our consent. Where specialists are nominated by the practice in advance and their charge out rates are specified in the policy period agreement, their normal hourly rates may be claimed. Where this is not the case, charge out rates will normally be restricted to the highest hourly rate agreed for the practice. In all cases, Claims should be notified before costs are incurred on specialists.
Q8. Can the costs of preparatory work prior to a meeting with or visit by HMRC be claimed?
A8. Reasonable costs of preparing for a meeting with HMRC or a compliance visit may be claimed. Each claim will be reviewed on its merits but, generally speaking, preparatory costs should be a relatively small part of the overall claim. The aim of any preparatory work should be to forestall further or unnecessary queries by HMRC and to reduce the overall costs of the claim.
Q9. What preparatory costs would Qdos Vantage consider to be “reasonable”?
A9. Examples of reasonable costs include:
Q10. What preparatory costs would Qdos Vantage not accept as part of a claim?
A10. Examples of costs that would not be accepted include:
Q11. Can the costs of representing a client at a VAT or PAYE/NIC compliance visit be claimed?
A11. If someone from the practice decides to attend a records review or compliance check by HMRC, any costs incurred during the records review itself will not be covered under the policy. The costs that will be covered include:
Q12. Does there have to be dispute with HMRC about the amount of tax at stake in a VAT or PAYE/NIC compliance check before a claim may be made?
A12. No. The costs of responding to HMRC can be claimed from the outset. Whether or not there is such a dispute is irrelevant. For that reason, Qdos do not make a distinction regarding so-called “pre-dispute costs” to which some Tax Fee Protection providers apply a lower limit.
Q13. Are tax avoidance schemes covered?
A13. In most cases, tax avoidance schemes are marketed with their own ‘fighting fund’ to cover a challenge from HMRC. Unless Qdos Vantage has approved the scheme in question in writing prior to its adoption or prior to any enquiry arising, no professional fees will be covered. For the definition of “tax avoidance scheme”, please see the Defintions section of the policy document.
Q14. What if a client has acted dishonestly?
A14. Where HMRC alleges dishonesty or fraud, the claim is likely to be restricted from the point at which the allegation is made. However, fees will not be refused retrospectively. Enquiries under Section 60 or 61 of the VAT Act 1994 will be covered, provided that at the culmination of the investigation the client is not found guilty of dishonesty, fraud or fraudulent intent. Criminal investigations and Civil Investigation of Fraud enquiries conducted under HMRC’s Code of Practice 9 are not covered by the policy.
Q15. Are there any conditions regarding record keeping?
A15. Clients are expected to keep prime records. Where this is not the case and additional costs arise because of poor records, the claim may be restricted. In any case we would not cover the costs of reconstituting records.
Q16. Can the practice issue interim bills to Qdos Vantage?
A16. As long as the required copies of key correspondence have been sent to Qdos Vantage by the practice as the claim progresses, interim invoices will be accepted and paid. This enhances cash flow for the practice and keeps Qdos Vantage up to date on the costs being incurred.
Q17. Who will pay the VAT on invoices, where the practice is the insured party on a Non-Regulated scheme?
A17. As the practice is the policyholder and insured party, the work invoiced is the subject of an insurance claim and HMRC has accepted that this is outside the scope of VAT. On a Non-Regulated Scheme, the practice should therefore invoice the net costs, excluding VAT, to Qdos Vantage.
Q18. Who will pay the VAT on invoices, where clients are the policyholders on a Regulated Scheme?
A18. The practice should issue an invoice to the client and send a copy to Qdos Vantage. Clients who are VAT registered will be able to reclaim the VAT in the usual way. Where the client is not VAT registered, the insurer will pay the gross amount including VAT. Where a client is partially exempt, the insurer will pay the gross amount including VAT. Where a client is using the VAT Flat Rate Scheme, the scheme percentage used includes an allowance for VAT incurred on purchases or expenditure, and therefore the insurer will pay the net amount excluding VAT.