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Tax Investigation Insurance

HM Revenue & Customs investigations

On this page you will find information about:

  • Tax investigation insurance benefit you can access with your MU membership
  • What’s covered by the scheme
  • How to claim
  • Additional cover

Introduction

This is a summary only. For definitive information on policy cover, terms and exclusions please refer to the policy wording.

Name of the insurer

This policy is underwritten by Markel Insurance Co Ltd via Abbey Tax and arranged by Hencilla Canworth Ltd.

Eligibility

Members of the Musicians’ Union (MU) permanently resident in Great Britain, Northern Ireland, the Isle of Man and the Channel Islands.

Note: You must maintain your subscription payments to the Musicians’ Union for cover to remain operative

Demands and needs

This policy meets the demands and needs of individual members that wish to protect against the professional fees of a Tax Investigation or VAT investigation.

Policy cover

This policy provides fee reimbursement of up to £100,000 in the event that one of the following HM Revenue & Customs (HMRC) investigations or disputes occurs in connection with a member’s activities as a musician trading as a sole trader, partnership or Ltd company.

Code of Practice 8 enquiries (£5,000 limit of indemnity) and Inheritance Tax enquiries (£5,000 limit of indemnity)

HMRC Enquiries and Disputes

(i) Business Self Assessment Full Enquiry
A Full Enquiry by HMRC into a members Self Assessment Return following the issue of a Notice under – S9A or S12AC of the Taxes Management Act 1970; or– Paragraph 24(1) Schedule 18 Finance Act 1998 together with a request to examine all of your business books and records.
(ii) Personal Self Assessment Full Enquiry
A Full Enquiry by HMRC into a members Self Assessment Return following the issue of a Notice under – S9A of the Taxes Management Act 1970 into their non-business tax affairs, for example into rental income and/or interest received. This will be accompanied with a request to examine all of the prime documents.
(iii) Income Tax Self Assessment Aspect Enquiry
An Enquiry by HMRC which is restricted to one or more specific aspects of a members Self Assessment Return following the issue of a Notice under– S9A or S12AC of the Taxes Management Act 1970.
(iv) Corporation Tax Self Assessment Aspect Enquiry
An Enquiry by HMRC which is restricted to one or more specific aspects of a members Self Assessment Return following the issue of a Notice under– Paragraph 24(1) Schedule 18 Finance Act 1998.
(v) Employer Compliance Dispute
– A Dispute which takes place after HMRC have indicated an expression of dissatisfaction with the Designated Client’s PAYE, CIS, and/or NIC affairs following an Employer Compliance visit by HMRC or following an expression of dissatisfaction with a members P11Ds or P9Ds
(vi) IR35 Dispute
A Dispute which takes place when HMRC challenge the status of a members contract for services and invokes the IR35 legislation following either – the issue of a Notice under Paragraph 24(1) Schedule 18 Finance Act 1998; or – an HMRC Employer Compliance visit; or the issue of a ‘Check of Employer Records Letter’.
(vii) VAT Dispute
A Dispute which takes place – following a VAT control visit where a written decision, assessment or statement of alleged arrears is received from HMRC into a members Value Added Tax Return; or – following the receipt of a notice of VAT default surcharge, misdeclaration or late registration penalty.
(viii) Schedule 36 Pre Dispute
A written request by HMRC under Sch36 FA2008 to inspect business records, assets or premises, including
– inspections undertaken to ensure compliance with VAT and PAYE regulations
– inspections undertaken in relation to the operation of the Construction Industry Scheme.
In the case of a personal taxpayer a request for the production of documentation to check their Income Tax position.
(ix) Code of Practice 8 Enquiries
HMRC Enquiries commenced under S9A or 12AC of TMA 1970 or Paragraph 24 (1) Schedule 18 FA 1998 accompanied by and conducted under HMRC’s Code of Practice 8 procedures. Provided that at conclusion of the enquiry no material omissions were identified and/or a member was not found guilty of fraud or any fraudulent intent.
(x) National Minimum Wage Pre Dispute
A written request by HMRC to inspect/check business records, including – inspections undertaken to ensure compliance with the National Minimum Wage Act – requests for documents and particulars prior to the issue of an assessment of arrears or notice of underpayment
(xi) Inheritance Tax Enquiries
Enquiries by HMRC into Inheritance Tax Returns submitted to Capital Taxes Office, including – matters relating to the periodic and proportionate charges applying to Trusts – Returns in respect of Estates of Deceased Persons provided the Policyholder holds a Probate License and submitted the IHT Return.

Duration of insurance

The policy runs for 12 months from the 1st January and is annually renewable by the MU.

Territorial limits

Enquiries and Disputes undertaken by HMRC into tax returns processed through the UK tax system excluding the Isle of Man and the Channel Islands.

What is not insured

1. any claim made, brought or commenced outside the Territorial Limits;
2. any claim where the Professional Expenses are capable of being reimbursed under any other policy or certificate;
3. any incident, cause or event occurring prior to or existing at inception of this Policy;
4. an Enquiry under Public Notice 160 or Section 60 of the VAT Act 1994 or any matters handled by HMRC Specialist Investigations, Fraud Investigation Service, Civil Investigations of Fraud, Counter Avoidance and Criminal Investigations Sections. Also Code of Practice 9 cases and/or the defence of any tax and/or criminal prosecution;
5. any claim made where: (a) Income Tax or Corporation Tax Self Assessment Returns are submitted more than 90 days after the statutory time limits, except where HMRC accept that a reasonable excuse existed for the delay; or
(b) a member has not notified chargeability to tax to HMRC within the statutory time limits for doing so; or
(c) a Return is submitted at the final filing date which contains provisional figures in respect of all of the trading income and expenditure;
6. an investigation arising out of a voluntary disclosure made to HMRC in respect of omitted tax, NIC or VAT liabilities which become due as a result of a members deliberate act or following an HMRC campaign where the Designated Client has made an incorrect Return to HMRC;
7. Professional Expenses incurred before the written acceptance of a claim by Abbey Tax;
8. taxes, fines, interest or any other duties or penalties imposed or assessed upon the member by any revenue authority, court or Tribunal;
9. any Dispute arising under the National Minimum Wage Act 1998 or Enquiries from HMRC and/or Department of Work and Pensions into a claim made by a member under the Tax Credits Act 2002;
10. the cost of preparing and reconciling Returns, accounts, records or any other statutory returns, and the cost of professional valuations to support them. To include the reconciliation of VAT Returns to accounts, Construction Industry Scheme (CIS) Returns and Real Time Information (RTI) payment submissions.
11. Professional Expenses incurred in respect of: (a) any HMRC Enquiry into a tax planning arrangement where HMRC has allocated
(a) Disclosure of Tax Avoidance Scheme (DoTAS) Number for inclusion on the relevant Self Assessment Return or where a DoTAS Number would have been issued but for the failure to notify HMRC of the tax planning arrangement; or
(b) any matter relating to bespoke tax planning outside of the normal trade such as film partnerships or film schemes, or planning involving artificially created losses or loan arrangements; or
(c) cases referred to the General Anti-Abuse Rules panel.

Conditions

Reasonable precautions

The member must take all reasonable measures to minimise the likelihood of a claim being made under this Policy and take all reasonable steps to minimise the cost of any claim.

Insurers' consent

Insurers’ written consent must be obtained by the Policyholder before incurring Professional Expenses. This consent will be given provided Abbey Tax is satisfied that there are reasonable grounds for representation and/or there are reasonable prospects of disputing HMRC’s decision or allegations. In Employer Compliance, IR35 or VAT Disputes, unless Schedule 36 Pre Dispute cover has been taken out, a request for further information following an audit or control visit does not constitute a Dispute; there must be a challenge into the Designated Client’s treatment of any tax, NIC or VAT matter.

Claims procedure

A claim must be notified in writing immediately the member becomes aware of any incident, cause or event which has or is likely to give rise to a claim under this Policy. Failure to notify during the period of insurance may lead to the claim being denied.

Initial notification of a claim must be made in writing by first class post, email or via the Abbey Portal, and be received by Abbey Tax within the period of insurance by addressing it to: Abbey Tax One Mitchell Court, Castle Mound Way, Rugby CV23 0UY Tel: 0345 223 2727 Email: claims@abbeytax.co.uk Website: www.abbeytax.co.uk

Customer service/complaints

If you have a question about your MU insurance please contact: The Customer Services Manager Abbey Tax One Mitchell Court, Castle Mound Way, Rugby CV23 0UY Tel: 0345 223 2727 or Hencilla Canworth Ltd (Hencilla), Simpson House, 6 Cherry Orchard Road, Croydon CR9 6AZ, Telephone 020 8686 5050

MU insurance - general contract disclosure

You will not receive any advice or recommendations in connection with these insurances. The covers provided are available to qualifying members of the MU as a benefit of membership. Each Insurance product has been negotiated by Hencilla on behalf of the MU with the Insurer selected being the sole provider of each policy. Hencilla Canworth Ltd receives a commission from the insurers for arranging this cover. In sourcing and placing your policy, Hencilla acts as the agent of the Insurer.

Fair processing of your data

How Hencilla processes MU members personal data is detailed within the Hencilla Privacy Notice which is available on request or by visiting Hencilla's website.