HMRC investigations are random. The cost of defending one shouldn't be.
Every year HMRC opens hundreds of thousands of compliance checks and tax investigations — and being selected has nothing to do with whether you have done anything wrong. The cost of professional representation during an investigation can run into thousands of pounds. Fee protection insurance from Hulljady Chartered Accountants means that cost is covered, whatever HMRC throws at you.
WHAT WE DO
Fee protection services for individuals and businesses
Hulljady’s fee protection service covers the professional costs of responding to a wide range of HMRC compliance activity — from a simple information request to a full, in-depth investigation of your tax affairs.
Full Enquiry Cover
When HMRC opens a full enquiry into your tax return — examining your entire tax position for a given year — the professional costs of responding are fully covered. Full enquiries can last months or years and generate significant accountancy fees. With cover in place, none of that cost falls to you.
Aspect Enquiry Cover
Aspect enquiries focus on a specific element of your return — a particular expense claim, an income source, or a specific transaction. They are less comprehensive than full enquiries but still require careful, professional handling. Cover extends to all aspect enquiries across income tax, corporation tax, and capital gains tax.
VAT Investigation Cover
VAT compliance checks — whether desk-based or conducted at your premises — are covered in full. This includes disputes over input tax reclaims, the VAT treatment of specific supplies, and challenges to your VAT scheme eligibility.
PAYE & Employer Compliance Reviews
HMRC employer compliance reviews — examining your payroll, expenses, benefits in kind, and National Insurance contributions — are among the most common and most disruptive forms of investigation for businesses with employees. Cover extends to the full professional cost of responding.
IR35 & Off-Payroll Working Investigations
IR35 investigations are complex, time-consuming, and increasingly common. Where HMRC challenges your IR35 status or that of workers engaged through your business, fee protection covers the professional costs of mounting a defence — including any specialist advice required.
Self Assessment & Personal Tax Investigations
Cover extends to investigations into personal tax returns — including challenges to employment income, rental income, capital gains, and offshore assets. Individuals with complex tax affairs are increasingly targeted by HMRC's personal tax compliance teams.
KEY FIGURES
THE COST OF AN INVESTIGATION
What an HMRC investigation actually costs without cover
The true cost of an HMRC investigation is rarely understood until it arrives. These figures give a realistic picture of what professional representation costs across different types of enquiry — and why fee protection represents exceptional value.
Aspect enquiry — From £1,500 A targeted, single-issue enquiry handled by correspondence typically generates between £1,500 and £3,000 in professional fees depending on complexity and the volume of information requested by HMRC.
Full enquiry — From £5,000 A comprehensive investigation into a full tax return — examining multiple income sources, expenses, and transactions — typically costs between £5,000 and £10,000 in professional fees, and considerably more if HMRC pursues the matter to a tribunal.
VAT investigation — From £2,500 A VAT compliance visit or desk-based review typically generates between £2,500 and £7,500 in professional fees, depending on the period under review, the number of transactions examined, and whether any disputes arise over the VAT treatment of specific supplies.
Employer compliance review — From £3,000 An HMRC employer compliance review examining PAYE, expenses, and benefits typically costs between £3,000 and £8,000 in professional fees — and more where the review uncovers issues that require negotiation with HMRC.
Note: These figures represent professional fees only — the cost of your accountant’s time. They do not include any additional tax, interest, or penalties that HMRC may seek to recover as a result of the investigation. Fee protection covers the professional fees. Sound compliance practice — which Hulljady provides year-round — is the best protection against the underlying tax liability.
WHY IT MATTERS
Why fee protection is one of the most cost-effective decisions a business owner can make
HMRC’s investigation activity has increased significantly in recent years. Compliance checks, aspect enquiries, and full investigations are opened on businesses and individuals of every size — often entirely at random, with no suggestion of wrongdoing. What they all have in common is that they cost money to deal with professionally.
Random selection — Real
HMRC uses sophisticated data-matching technology to identify anomalies — but it also opens enquiries entirely at random as part of its compliance programme. Being selected does not mean you have done anything wrong. It does mean you need professional representation.
Professional fees — Significant
Responding to an HMRC investigation requires your accountant to review records, prepare responses, attend meetings, and correspond with HMRC on your behalf. Depending on the complexity and duration of the enquiry, professional fees can easily reach £5,000 to £15,000 or more — none of which is tax deductible.
Time — Consumed
Even with professional representation, an HMRC investigation consumes management time. Fee protection means the financial cost is covered, freeing you to focus on your business rather than worrying about escalating accountancy bills.
Peace of mind — Priceless
Knowing that if HMRC knocks on your door the professional cost of the response is fully covered — regardless of how long the investigation runs — is one of the most straightforward risk management decisions a business owner can make.
Important: HMRC opened over 300,000 compliance checks in the last reported year. Investigations are not reserved for large businesses or those suspected of fraud. Sole traders, limited companies, landlords, and individuals on PAYE are all routinely selected. Fee protection covers all of them.
WHY HULLJADY
Fee protection backed by genuine investigation expertise
Fee protection insurance is only as valuable as the firm standing behind it. A policy that covers your fees but is managed by an accountant with limited investigation experience will not produce the best outcome. Hulljady has handled HMRC investigations across every tax head — income tax, corporation tax, VAT, PAYE, and CIS — for over two decades.
When an enquiry opens, we take over immediately — reviewing the scope of HMRC’s request, preparing a comprehensive and carefully worded response, managing all correspondence, and — where necessary — representing you at a tribunal. Our experience means investigations are handled efficiently, professionally, and with the best possible outcome for you.
- Immediate response when an HMRC enquiry opens — no delays, no referrals
- All correspondence with HMRC handled by a qualified chartered accountant
- Investigation experience across all tax heads — income tax, CT, VAT, PAYE, IR35
- Proactive year-round compliance to minimise the risk of investigation in the first place
- Policy arranged and managed through Hulljady — one point of contact throughout
- Cover renewed annually with a personal review of your risk profile
COMMON QUESTIONS
Fee Protection — frequently asked questions
What exactly does fee protection insurance cover?
Fee protection insurance covers the professional fees charged by your accountant for responding to HMRC compliance activity — correspondence, document preparation, meetings, and representation. It does not cover any additional tax, interest, or penalties that HMRC may determine are due as a result of the investigation. The distinction is important — fee protection covers the cost of the defence, not the outcome. This is why sound year-round compliance, which Hulljady provides as part of its core service, is the best protection against the underlying liability.
Can HMRC investigate me even if I have done nothing wrong?
Yes — and this is the single most important thing to understand about fee protection. HMRC's compliance programme includes random enquiries that are opened with no prior intelligence and no suggestion of wrongdoing. Being selected for a random enquiry does not mean HMRC suspects you of anything. It does mean you need professional representation, and that representation costs money whether or not any additional tax is found to be due. Fee protection covers that cost regardless of the outcome.
How long does an HMRC investigation typically last?
This varies enormously depending on the type and complexity of the enquiry. A straightforward aspect enquiry resolved by correspondence might close within three to four months. A full enquiry into a complex tax return can run for one to two years or longer, particularly if HMRC raises a discovery assessment or the matter proceeds to a First-tier Tribunal. Fee protection covers your professional costs for the full duration of the enquiry — however long it runs.
Is fee protection tax deductible?
Yes — fee protection insurance premiums paid by a business are generally deductible as a business expense for corporation tax or income tax purposes, provided the cover relates to business tax obligations. This effectively reduces the net cost of the premium by your marginal tax rate — making it even more cost-effective than the headline premium suggests. Hulljady will ensure the premium is correctly treated in your accounts and tax return.
What should I do if I receive a letter from HMRC opening an enquiry?
Contact Hulljady immediately — before responding to HMRC. The tone, content, and scope of your initial response can significantly affect how an investigation develops. A poorly worded or overly comprehensive initial response can inadvertently broaden the scope of HMRC's enquiry. Our standard advice is to acknowledge receipt of HMRC's letter without providing substantive information, and to let us take over the correspondence from that point. If you have fee protection cover in place, we will notify the insurer and begin work immediately.
Does fee protection cover investigations going back several years?
HMRC can generally open an enquiry into a tax return within 12 months of the filing date for a standard enquiry, and up to four years later where there has been an innocent error. Where HMRC alleges careless behaviour, the window extends to six years, and where fraud or deliberate non-compliance is alleged, there is no time limit at all. Fee protection covers enquiries opened during the policy year — including those that relate to earlier tax returns — provided the policy is in force when the enquiry is opened. This is why maintaining continuous cover year after year is important.
READY TO GET STARTED?
Don't wait until HMRC writes to you. By then it's too late to arrange cover.
Book a free, no-obligation consultation with one of our chartered accountants. We will review your current exposure to HMRC investigation activity, explain exactly what cover is available, and arrange fee protection that means you will never face an unexpected professional fees bill again.