Tax Fee Protection
HMRC Tax and VAT Investigations can be daunting, disruptive and expensive. Tax fee protection is designed to help with the professional costs of responding to an HMRC enquiry, subject to the scheme terms.
An HMRC enquiry does not automatically mean something is wrong
HMRC enquiries may be risk-based or selected at random. Even where a return is accurate, responding properly can require records, explanations, calculations and professional correspondence.
Tax fee protection is intended to reduce the concern about professional fees while Merranti helps you organise the evidence and manage the enquiry.
Do not ignore a deadline or provide a rushed explanation. Early review normally gives the team more time to prepare a controlled response.
Structured support from the first HMRC letter to the enquiry outcome
The exact work depends on the enquiry and the current protection terms, but support may include the following.
Reviewing the notice
Checking the type of enquiry, the period under review, the information requested and the response deadline.
Managing correspondence
Preparing clear, consistent replies and acting as the main point of contact where authority has been provided.
Organising evidence
Identifying the accounts, bank records, invoices, contracts and supporting calculations relevant to the enquiry.
Technical responses
Explaining the tax treatment used and addressing HMRC questions with reference to the available records.
Meetings and discussions
Preparing for HMRC meetings and supporting discussions about information requests, adjustments and next steps.
Closing the enquiry
Reviewing HMRC's conclusions and explaining available options if an amendment, penalty or appeal point arises.
HMRC may review one figure or a wider part of your tax affairs
Enquiries can focus on a single item or involve a broader review. The policy must be checked before assuming any particular matter is covered.
Four practical steps after receiving an HMRC notice
Keep the complete notice
Retain every page, reference number, enclosure and deadline shown in the letter or online message.
Contact Merranti promptly
Forward the correspondence before responding so the team can assess the request and check the protection position.
Gather the records
Collect the relevant returns, accounts, bank records, invoices, receipts, contracts and prior correspondence.
Follow the agreed response plan
Provide accurate information through the agreed channel and keep a complete record of every submission.
Protection relates to professional fees, not the underlying tax bill
Tax fee protection is not a substitute for accurate records, correct returns or payment of tax. It is intended to help with eligible professional costs of defending or responding to an enquiry.
- Professional time responding to eligible HMRC enquiries.
- Preparing evidence and technical explanations.
- Representation and correspondence, subject to terms.
- Additional tax, interest or penalties due to HMRC.
- Costs outside the policy scope or limits.
- Matters excluded under the current scheme terms.
Good records make an enquiry easier to manage
Consistent bookkeeping, reconciled bank accounts and supporting invoices help Merranti explain the figures submitted and answer HMRC requests efficiently.
Where records are incomplete, tell the team early. It is better to identify a gap and agree how to address it than to send assumptions or unsupported figures.
Tax fee protection questions
Can HMRC open an enquiry if my return is accurate?
Yes. Some enquiries are risk-based and others may be selected at random. An enquiry is a request to verify information; it is not, by itself, proof that an error has been made.
Should I reply to HMRC before contacting Merranti?
Send the notice to Merranti first wherever possible. The team can review the deadline, requested information and response strategy before anything is submitted.
Does fee protection pay additional tax or penalties?
No. Fee protection is generally aimed at eligible professional costs. Any tax, interest or penalties assessed by HMRC remain separate.
Is every type of enquiry covered?
No. Eligibility, exclusions, limits and notification requirements apply. Merranti must check the current scheme terms and the facts of the enquiry.
Can I arrange cover after an enquiry has started?
Existing or known enquiries are commonly excluded. Speak to Merranti about the current terms rather than assuming retrospective cover is available.
Received a letter from HMRC?
Send the full correspondence to Merranti promptly so the team can review the deadline, explain the next steps and check whether fee protection may apply.