The Federation of Small Businesses (FSB) has reported tax
inspections are on the rise and recent research from business
insurance specialists, Premierline Direct has highlighted the
disruptive impact this can have on business owners. In the current
climate where a business cannot afford to take any risks, Chris
Little, managing director of Premierline Direct offers advice on
how companies can supplement the support from their financial
advisor to protect themselves when under investigation.
The FSB reported that more SMEs are experiencing a tax
inspection and that there has been a 10 per cent rise in the number
of cases within the last year. Further exasperating the situation
for business owners is the fact that the Chancellor gave HM Revenue
& Customs greater powers to inspect companies at shorter notice
in the last Finance Bill.
While businesses recognise the importance of having a good,
qualified accountant or financial advisor in the first instance who
will ensure that the company adheres to stringent accountancy rules
and regulations, there is no certainty that a business will not be
investigated. Having additional protection can provide reassurance
for the business owner should they find their company under
investigation.
Under Commercial Legal Protection within a business insurance
policy, businesses can find shelter. It may not seem the most
obvious cover for a business to have and it isn't compulsory like
employer's liability, but it will help to financially protect a
firm in a tax inspection or VAT dispute. With businesses funding
the cost of an inspection from company profits, business savings or
even personal savings, the value of having Commercial Legal
Protection goes beyond just eliminating the emotional stress caused
by the situation.
In the event of a full enquiry or aspect enquiry, for example
where the HM Revenue & Customs is investigating a specific
element of the business' accounts such as employee bonuses, tax
returns or National Insurance contributions, having Commercial
Legal Protection will mean the insurance provider will either
appoint an accountant to act on the business' behalf or use the
policyholder's existing advisor. The level of protection provided
by the cover will include the cost of the expert's time spent
negotiating with the HM Revenue & Customs throughout the
dispute. It will also cover VAT disputes and Employer's
Compliance.
With recent research highlighting that business owners find tax
inspections disruptive, a constant worry, make it difficult for
them to focus on running their company and more stressful than
moving house or even starting the business, any measures they can
take to reduce the stress and anxiety of being investigated is of
benefit. In the event of receiving a letter from HM Revenue &
Customs, all it takes is one call to the insurance provider to make
a claim for assistance and alleviate the stress of dealing with the
situation.
