What’s Covered — and What It Means for You
Tax investigation insurance covers the accountancy fees for handling an investigation on your behalf. This includes correspondence with HMRC, preparing documentation, and attending meetings. It covers the professional fees — not any tax that may be found to be owed.
Types of HMRC investigation
HMRC can open several types of enquiry:
- Full enquiry — your entire tax return examined in detail
- Aspect enquiry — a specific element queried
- Compliance check — your records and processes reviewed
- VAT inspection — your VAT records and returns examined
- Employer compliance review — PAYE and national insurance checked
Any of these can happen to any business. The cover applies to personal tax (self assessment), corporation tax, VAT, PAYE, and national insurance enquiries.
What triggers an investigation
HMRC investigations can be triggered by:
- Random selection (yes, really)
- Inconsistent figures between tax returns
- Late filing history
- Industry risk profiling
- Data-matching through the Connect system
- Lifestyle indicators not matching declared income
- Tip-offs from third parties
Doing everything correctly doesn’t guarantee you won’t be selected. That’s precisely why the cover exists.
We Include It Because We Stand in Your Corner
FD Works includes tax investigation insurance as standard in every service tier — Organise, Understand, and Advise. It’s not an add-on. It’s not an upsell. It’s built into the service.
We deliver quality work that stands up to scrutiny. Our tried and tested processes, regular reviews, and attention to detail mean your accounts and tax returns are prepared to a standard that minimises risk. Clean bookkeeping via Xero. Organised records through Dext. Systematic workflows that produce accurate returns.
But we can never eliminate the risk entirely. Random selection happens. HMRC data-matching throws up queries. That’s why the cover exists.
If an investigation happens, we handle it. We deal with HMRC on your behalf — the correspondence, the documentation, the meetings. You focus on your business. We rely on our cover to handle the costs rather than passing them to you.
That’s what standing in your corner means.
Included in Every FD Works Package
Organise
Tax investigation insurance included as standard alongside annual accounts, bookkeeping, VAT, payroll, and quarterly Health Checks. Your compliance is handled — and protected.
Understand
Everything in Organise, plus full monthly management accounts and review meetings. Your numbers drive decisions, and your tax affairs are protected.
Advise
Everything in Understand, plus FD-level strategic support. For businesses raising investment or managing complex structures, your annual accounts, self assessment, and corporate tax affairs are all covered.
Error protection: If we make a mistake, we pay for it. It’s never happened.
Tax Investigation Insurance: Your Questions Answered
What is tax investigation insurance?
Tax investigation insurance covers the professional accountancy fees involved in defending an HMRC enquiry. It pays for your accountant’s time handling correspondence, preparing documentation, and dealing with HMRC on your behalf.
It does not cover any additional tax found to be owed — only the professional fees for your defence. The terms “tax investigation insurance” and “fee protection insurance” are used interchangeably in the industry.
Is tax investigation insurance worth it?
Yes. HMRC conducts thousands of investigations each year, and selection can be entirely random. Professional fees for defending even a straightforward enquiry can run into thousands of pounds.
Tax investigation insurance means you’re not choosing between proper defence and cost. FD Works includes it as standard in every service tier — you don’t need to decide.
What triggers an HMRC investigation?
HMRC investigations can be triggered by random selection, inconsistencies between tax returns, late filing history, industry risk profiling, data-matching through the Connect system, lifestyle indicators, or tip-offs.
Doing everything correctly doesn’t guarantee you won’t be selected. That’s precisely why tax investigation insurance exists.
How much does a tax investigation cost?
Professional fees for defending an HMRC investigation typically range from £2,000 to £10,000+ depending on complexity and duration. A full enquiry examining your entire tax return costs significantly more than an aspect enquiry looking at one specific area.
Tax investigation insurance covers these professional fees so you’re not out of pocket.
What does tax investigation insurance cover?
Tax investigation insurance typically covers professional fees for: full tax enquiries, aspect enquiries, VAT inspections, PAYE compliance reviews, national insurance disputes, and employer compliance checks.
Some policies also cover appeals to tax tribunals. It covers the cost of your accountant defending you — not any tax liability found.
Is tax investigation insurance the same as fee protection insurance?
Yes. “Tax investigation insurance” and “fee protection insurance” are different names for the same thing. Both cover the professional accountancy fees involved in defending an HMRC enquiry. The industry uses both terms interchangeably.
Peace of Mind, Built In
Tax investigation insurance is included as standard with every FD Works package. You don’t need to buy it separately, worry about renewal, or hope your cover is adequate. We’ve taken care of it.
Let us stand in your corner.
“Let us stand in
your corner”
Everything starts with a chat
We would love to say hello, find out about you and your one-of-a-kind business.
Speak with us to start unlocking your ambition and potential. There is no better time to start than now.