Over the past 12 months, we have seen a noticeable increase in the number of HMRC enquiries affecting our clients. It isn’t simply the number of enquiries that has changed.
Requests for information are increasingly extensive. Information requests may include highly detailed questions. HMRC’s deadlines for responding are often very tight.
An HMRC enquiry can happen to any taxpayer or business. Receiving an enquiry does not necessarily mean that HMRC believes you have done anything wrong. However, once an enquiry begins, dealing with it properly can require a significant amount of professional time.
What does an HMRC enquiry involve?
Every enquiry is different. In some cases, HMRC may initially ask a relatively straightforward question about a tax return or a particular transaction. In others, they may request substantial amounts of information and supporting documentation.
What starts as one question can lead to further questions. HMRC may request explanations of figures, copies of invoices and records, transaction details, or evidence supporting the adopted tax treatment.
Our role is not simply to forward information to HMRC.
We review what HMRC is asking for. Our review also determines what information they are reasonably entitled to request. Next, we prepare appropriate responses and provide technical explanations where necessary. Finally, we challenge HMRC when we believe their interpretation or approach is incorrect.
In short, we go into bat for our clients.
That can involve many hours of work over a period of weeks or months. Without fee protection, the professional costs of dealing with an enquiry are normally payable by the client – even where the enquiry ultimately concludes that their original tax position was correct.
Why we offer Fee Protection
Our Fee Protection Scheme is designed to remove much of that financial worry.
Subject to the terms of the scheme, if HMRC opens an enquiry covered by the policy, the professional fees incurred by Seagrave French in dealing with it are covered.
This means that we can concentrate on representing you and achieving the best possible outcome without you having the additional concern of professional fees mounting up every time HMRC asks another question.
We don’t operate the scheme as a significant source of profit. We offer it because we believe it provides valuable protection for our clients and allows us to properly defend their position when HMRC comes calling.
Why is the cost increasing this year?
Unfortunately, the changing HMRC enquiry environment has consequences for the cost of providing this protection.
We have experienced more enquiries over the last year and those enquiries are becoming more involved. At the same time, the premium we have to pay to provide Fee Protection to our clients has increased.
As a result, from 1 October we will need to increase the amount we charge clients who choose to participate in the scheme.
We are genuinely disappointed to have to make that increase. However, we cannot provide the scheme at a loss, and we believe maintaining comprehensive Fee Protection remains considerably better for our clients than reducing the level of protection available.
Is Fee Protection worth considering?
Ultimately, joining the scheme is your choice.
However, if you have previously decided not to take Fee Protection, we would encourage you to reconsider it this year.
Based on what we are seeing in practice, HMRC enquiries are becoming more frequent and more detailed. Even a compliant taxpayer who has done nothing wrong can find themselves facing numerous questions and requests for information – and consequently significant professional costs in responding to them.
Nobody wants an HMRC enquiry.
But if one arrives, having Seagrave French on your side, able to deal with HMRC and defend your position without you worrying about the professional fees involved, can make an unpleasant experience considerably easier.
We will shortly be contacting clients with details of our Fee Protection Scheme for the year beginning 1 October 2026, including details of the new premium.
If you would like to discuss the scheme or understand how it could protect you or your business, please contact us.
