Why Use a Broker for Tax Investigation Insurance?

There are three ways to get tax investigation insurance: through your accountant’s fee protection scheme, direct from an underwriter, or through a broker acting for you. A broker route gives you an individual policy in your own name, the freedom to keep your own accountant, and someone on your side if you need to claim. Solar Protect arranges this cover as part of a group that also handles professional indemnity, so your representation is supported from start to finish.

Tax investigation insurance, sometimes called tax fee protection, does one job well. It pays for the professional who represents you when HMRC opens an enquiry or compliance check, so you are not left facing the cost of expert help on your own. How you buy that cover matters, because the route you choose shapes who holds the policy, who you can use to defend you, and who stands in your corner if a claim is needed.

What are the three ways to get tax investigation insurance?

Most people come to this cover by one of three routes, and it helps to understand each before you decide.

A fee protection scheme through your accountant

Many accountancy firms run a fee protection scheme. The firm holds the arrangement with an insurer and enrols willing clients, usually as an annual addition to their fees. It is convenient, and the practice already knows your affairs. The trade off is that the scheme belongs to the accountant rather than to you, and the cover is tied to staying with that firm. If you move accountant, you normally leave the scheme behind. You can read more about how these arrangements work on our accountant scheme page.

Buying direct from an underwriter

Some insurers will sell a policy straight to the public. This can look like the simplest option, but you are dealing with the underwriter alone. There is no one acting for you when you buy, no one to sense check whether the cover fits your situation, and no independent help if a claim becomes complicated.

Arranging cover through a broker

The third route is to arrange cover through a broker who acts for you. The policy is issued in your own name, you keep the accountant you already trust, and you have a broker to turn to if you ever need to claim. This is the route Solar Protect is built around. To understand the product itself, see what tax fee protection insurance is.

What does a broker actually do for you?

A broker sits on your side of the table. When you take out a policy, the broker helps you choose cover that matches how you earn and how you are structured, whether you are a sole trader, a contractor, a partnership or a limited company. The broker explains what is included and what is not, so there are no surprises later.

The real value often shows when HMRC makes contact. An enquiry can arrive without warning, and the letters can be hard to read. Your accountant handles the technical defence, and your broker makes sure the claim is registered properly and that the policy responds as it should. If a question arises over what the cover pays, you have someone whose job is to help you rather than the insurer. You can see who normally foots the bill on our page on who pays your accountant’s fees in an HMRC enquiry.

What are the practical advantages of the broker route?

The broker route gives you an individual policy held in your own name, so the cover follows you and not your accountancy firm. You keep the freedom to use your own accountant, which matters because the person who knows your figures is usually best placed to defend them. You gain a broker to guide you through any claim. And with Solar Protect you are dealing with a business that is part of a group which also arranges professional indemnity for regulated professions through Apex Insurance Brokers, so protecting professionals against risk is what the group does day to day.

What does the cover protect you against?

A Solar Protect policy can cover up to £100,000 of your accountant’s professional fees for handling an HMRC enquiry or compliance check, and there is no excess to pay. It responds to full and aspect tax enquiries into Corporation Tax and Income Tax, including Scottish taxes, to PAYE and National Insurance compliance checks, to IR35 and employment status questions, to Construction Industry Scheme (CIS) enquiries, to VAT compliance checks, and to Code of Practice 8 investigations. Directors and partners can be included, subject to the policy limits.

It is important to be clear about what the insurance pays. It covers the professional representation fees, the cost of the expert who deals with HMRC for you. It does not pay any tax, interest or penalties that turn out to be due. HMRC compliance checks can look at any tax you pay, your accounts and tax calculations, your Self Assessment or Company Tax Return, and your PAYE records if you employ people, so having a professional ready to respond is worth a great deal.

Is the broker route right for you?

If you value keeping your own accountant, want the policy in your own name, and like the idea of a broker to help you when it counts, the broker route is likely to suit you. It is especially worth considering if you are a sole trader, a contractor, or running a small company, where an unexpected enquiry can be both stressful and expensive. You can learn more about the cover itself on our tax investigation insurance page.

Ready to protect yourself against the cost of an HMRC enquiry? You can get a quote in minutes, or contact us to talk it through first. If you are an accountant looking to offer this cover to your clients, take a look at our accountant scheme.