Recent HMRC trends and the opportunity of Fee Protection

Insurance

Working in partnership with The IFA

• H M Revenue & Customs Activity• Claims Trends• Taxwise - Services & Benefits • The IFA

• HMRC are targeted to deliver an extra £7billion in compliance yield each year by 2014/15.”

• The tax gap - the difference between the tax that HMRC thinks should be collected and the amount actually collected – is estimated to be more than £35 billion.

• The government spending review has made available £917m to tackle tax evasion, avoidance and fraud from 2011/12.

• HMRC have been targeted with reducing costs by 25%, whilst increasing the compliance yield. The Single Compliance Process aims to achieve this, by using HMRC resources more efficiently, by taking a more targeted approach to enquiry work.”

HMRC - Activity

HMRC Activity

HMRC income from investigations into personal tax returns

•A record £20.7bn in additional revenue was collected by HMRC through compliance work in 2012/13 - up 11% (source UHY Hacker Young).•The extra revenue from HMRC investigations came from both small businesses and individuals: Small businesses jumped 30% in 2012/13, to £565m, while the share clawed back from investigations into personal tax returns rose by 38% to £609m.•Since the 2010 spending review HMRC has launched 40 specialist taskforces aimed at extensive investigation into businesses and individuals. These have raised over £60m of additional revenue already.

HMRC Activity

• Enquiries concluding faster• HMRC risk profiling• More enquiries, more focussed

HMRC doing what always done but……more of it and with more focus and efficiency!

HMRC Activity

ClaimTrends

THE NUMBERS

•The number of claims notified has increased considerable in recent years, with average yearly increases of 30% for the past three years.•The increase has come in the main from Income Tax Aspect and Full enquiry claims, which have increased in number by almost 2.5 times in the past three years.•In 2013 Taxwise dealt with almost 6,000 claims and paid out

£5.7m in claim payments.•2014 statistics project over 6,400 claims and costs of £6.2m

Average Claim Costs

CT Full Enquiry £3400

CT Aspect Enquiry £1750

IT Full Enquiry £2000

IT Aspect Enquiry £1000

VAT Compliance Visit £1000

PAYE Compliance Visit £1300

Business Record Checks £200

Simple Aspect Enquiries £400

IR35/Status Enquiries £1300

What is Fee Protection Insurance?

• Insurance policy • Allows an accountant to defend clients• In the event of an HMRC enquiry• Policy pays for all of the fees incurred• Clients get professional representation and peace

of mind

Who are Taxwise? Key facts

• 3,200 accountancy clients• £14m premium income• 65 staff• FCA Authorised• Peninsula Group Company• Irwell Insurance Company

Advice Line

• Tax and VAT advice lines• Free/Unlimited for all accountancy clients• 50,000 advice calls per annum• Employment Law Advice Line • Free/Unlimited for all clients taking Cover• Legal Advice on all forms of UK Law • Free/Unlimited for all clients taking cover

TAXWISE REWARDS

• HR Online• Seminars• Webinars• Employment Law Advice

All part of the service…

• Advice lines• E-bulletins• Quarterly newsletter• Taxwise Rewards• Consultancy support• No policy excesses • No policy inner limits

QUESTIONS?