Tax Investigation Protection Service (TiPS)

Updated: 12.01.2024

What is TiPS?

Tax Investigation Protection Service.
This is a service offered by Avar that is designed to protect our existing Clients against the costs associated in dealing with with an HM Revenue & Customs tax enquiry or investigation.
It is not to cover the tax any additional tax that may become payable as a result of the enquiry.
It is purely to cover the professional Cost that may arise, which could be extremely significant.
The events that may give rise to HMRC are discussed below.
Given the economic climate and for the Government to raise funds, it is anticipated that the number of enquires may go up by at least 100%.
There has never been a better time to subscribe to our TiPS Service.
For an annual fee, you can rest assured, that the costs will be covered.

HMRC has the power to inspect business documents and assets at your premises.
They can also:
- ask for documents and information,
- make unannounced inspections
- go back up to twenty years to investigate matters.
In recent years HMRC have launched various checks on specific industries.
It is not uncommon for a business to receive a letter from HMRC advising that they want to carry out a routine VAT or PAYE check.
This often lead to a more in-depth enquiry because they are entitled to review all transactions across the business.
IR35 and employment status disputes also seem to be on the rise.
HMRC can visit at any time and we think it is vitally important you can get the advice you need, when you need it.

HMRC launched a “Cross Tax Enquiry” into an engineering company that encompassed a full review of all entries on the corporation tax return and four years of PAYE and VAT records.
It became evident very early on that HMRC was unsure exactly what they were looking for and were undergoing a fishing expedition.
The questions asked were very detailed and seemingly endless and after one meeting alone, over 100 questions followed.
Despite the best efforts of the advisor, the enquiry dragged on for two and a half years.
With only minor adjustments to be made, over £35,000 of fees were settled under the Tax Investigation Protection Service.

The TiPS in the first instance is a services offered by Avar.
The level and extent of cover together with the service terms and conditions are those written by Profession Fee Protection Ltd. That is the extent of the policy.
However, Avar have their own terms and conditions which override the principles and those are designed to improve the quality of the cover and reduce the risks and costs.
Professional Fee Protection Ltd is underwritten by IG Insurance https://www.iginsure.com/

Enquiries often involve a detailed examination of a specific item on a tax return whilst others may extend to a full review of an individual’s personal affairs.
We have experienced a number of enquiries asking for evidence to support the numbers reported on a tax return.
A full investigation can involve protracted correspondence with HMRC.
A recent example went over a two year period where HMRC asked for worldwide bank statements and credit cards to evidence lifestyle.

HMRC considered they had information to suggest a client had not declared all of their income.
They launched an enquiry and refused to tell the client what information they held.
The enquiry lasted for over three years and cost over £11,000 to deal with.
It turned out HMRC’s information was incorrect, but the accountant’s fees were still settled under the Tax Investigation Service.

HMRC is actively increasing its number of tax enquiries in order to raise more tax revenue.
Many tax enquiries are conducted at random.
You could find yourself at the centre of a tax enquiry at any time, even if you have done nothing wrong.
The professional fees associated with a tax enquiry can amount to thousands of pounds.
These costs are additional to our normal annual fees.
We know and understand your business and personal financial affairs.
We want to provide you with the best possible defence saving you time and money in the long run.

HMRC conducted 337,000 tax enquiries last year, showing just how many UK taxpayers it suspects of underpaying tax.