Insurance for investigation fees

Poodle

Hi

Do any of you sell insurance to your customers against the accountancy fees they could suffer for an investigation?

If so please could I have details, provider, cost etc., privately if you like?

I looked at this a year ago and decided against it, However yesterday I had a client arrive at a meeting with a leaflet and today I have had another client ask and so I would like to revisit.

Poodle

claudialowe

There are quite a few different companies offering this sort of insurance - look at accountingweb as it is mentioned there quite frequently.

Different companies other different services - either for your practice as a whole, or individual clients taking out insurance, with some of them you have to do everything and take a cut, others you have to do very little. You also need to read the small print very carefully as to what is covered - aspect enquiries, full, PAYE etc etc. Also some of them will use you to do the enquiry work, and others use their own accountants. It seems a real minefield :confused1:

I have got a brochure lying around somewhere, and someone was going to call me back - and they haven't - it is also something that I am thinking about.

Perhaps there are others on here - either of the Deans? - who have experience of this?????

Claudia

Dean

claudialowe wrote: »

Perhaps there are others on here - either of the Deans? - who have experience of this?????

I'll wait for a few more replies and see how this thread goes....

Regards

Dean

deanshepherd

I'm glad this issue has come up because, similarly to Claudia, I do tend to address this each year and so far I have always decided against it.

My problem with the insurance is that it just doesn't seem to be good value for money.

In my 10 or so years working in tax I think I have perhaps dealt with 15 or 20 enquiries. Since being in practice on my own for the past 3 years I have only received 1 enquiry.

Enquiries I have dealt with in the past have perhaps taken on average between 5 and 10 hours to complete. My most recent enquiry took only 3 hours of my time from start to finish. For which my client happily paid my £210 fee.

I have not looked into costs recently but the cheapest I saw previously were around £100 per annum for an individual and perhaps twice that for a company.

I think I would like to have an arrangement in place so that if any clients ask about it I can say, here's a leaflet - feel free to take me up on it if you like. But I found many providers pushed you to either give a hard sell to the clients or take out insurance for the whole practice.

I would much rather say to clients, tell you what.. pay me an extra £50 per annum and I will deal with any enquiries that may or may not arise completely gratis. Unfortunately we are not allowed to do this!

If anyone uses a particular insurer and has anything to report, good or bad, then I would be interested to hear.

Poodle

Hearing what you are saying guys and perhaps it is something that the AAT may be able to assist MIP's with, as they do the PII.

I am just about to embark on year 4 and I have not yet actually had an enquiry on my own work to deal with and only one that came in cold. It's just a coincidence that I have had two enquiries on two consecutive days.

But I do know that this question did come up at an AAT local meeting and it would appear that many members absorb the cost of enquiries, particularly where they prepared the accounts and do not charge their customers.

Poodle

deanshepherd

I think many accountants often feel obliged in some way to absorb the costs.

I always tell my clients that enquiries are charged on top of quoted fees but sometimes you just want to have a fight with HMRC and are less concerned with recovering the cost!

Ooh the injustice of it all!!

claudialowe

I have been on my own now for about 7 years and had 1 aspect enquiry - easily dealt with - and cost the client about £500.00 - only because I had to photocopy £20K of petrol receipt at only a tenner a fill-up!!!!!!

End of last year I had a full enquiry which cost the poor client about £1,500 in my fees and HMRC ended up with £500 :confused1::confused1::confused1:

If it was a job that would only take a couple of hours then I might do it free, but anything more I would charge.

If people are members of the FSB then investigation work is covered by their subs - but they have to use accountants appointed by FSB.

Claudia

Dean

deanshepherd wrote: »

I would much rather say to clients, tell you what.. pay me an extra £50 per annum and I will deal with any enquiries that may or may not arise completely gratis. Unfortunately we are not allowed to do this!

This is essentially what I do. I see it as 'self-insurance'. Fixed fee paid once a year. Clients' who take up the standing order and subsequently have an enquiry, have the enquiry dealt with FOC.

But as Dean says.... I fear i've said enough!

Regards

Dean

peugeot

Our firm offers this insurance and it seems to be well-received by the clients.

Best regards
Steve

JodieR

I signed up to pfp around this time last year. They wanted me to send a list of all my clients' names & addresses so that they could send a letter & associated bumf to them all. I wasn't keen on that as I didn't like the way the letter was worded - far too pushy for my liking! So I evenutally persuaded them to send the leaflets to me & I included a paragraph in the letter I sent to my clients requesting their tax return information, and I enclosed their leaflets too. Most clients then discussed it with me when I saw them during the year but I don't think any have taken it out.
It's just a case of CMA really, I'd hate to be in a situation where a client gets an enquiry & says that if they'd known about the insurance they would have taken it out. And it didn't cost me anything (I think the deal is that I get a % of the fee should any of my clients take it out)

Jodie

JodieR

deanshepherd wrote: »

I would much rather say to clients, tell you what.. pay me an extra £50 per annum and I will deal with any enquiries that may or may not arise completely gratis. Unfortunately we are not allowed to do this!

I remember the accountant my mum used around 10 years ago offering her the option of paying a bit extra (5% of fees or something like that) to cover dealing with an enquiry - have the rules changed now or do you think that this accountant had to have a special license or something to offer this service?

deanshepherd

As far as I was aware, such an arrangement constitutes an offer of insurance which requires you to be authorised to do so by the FSA.

I don't know of any accountants that have that authority.

peugeot

The insurance we offer to the clients in respect of tax investigations is regulated through ACCA rather than the FSA. We have to have additional wording on our notepaper in addition to the wording required by the ACCA in respect of our auditor status.

Poodle

Hi All

I have taken the bull by the horns and made contact with a couple of companies and CCH, who provide the MIP business support helpline are calling out to see me in April.

You do not have to be an FSA member for the scheme they have and they accommodate small practices with 30-50 clients as well. More importantly you keep control of your database of clients. The chap descibed it as me selling a service to my client at a mark up.

I will let you all know how I get on.

Poodle

deanshepherd

When I mentioned FSA regulation I actually meant people who were self-insuring rather than offering a third-party product.

As Steve says, members of DPB firms are authorised to advise clients on which type of fee protection insurance they should go for so they have a bit more flexibility. They are still not allowed to 'self-insure', they just have more options for selling third-party insurance products to their clients.

AAT members can only offer 'client-decide' policies or 'full practice cover' policies.

Poodle

Dear all,

I met with the rep yesterday.

Basically, I buy an insurance policy and then I offer/sell the additional service to my clients. I have decided to give this a go as it could become a lucrative additional income stream.

You might like to view the enclosed links

http://www.dragontree.tv/taxsafeaspectplus.html

http://www.dragontree.tv/Video/gk5gj9/CCH/Gallery2.html

Fee Protection Details of policy

Total Cover Available
£75,000 for Full Enquiries & Disputes
No Excess
Income Tax Aspect Enquiry
30 Hours of Partner time or £3000 Max payout, Excess 1 hour of Partner Time
Corporation Tax Aspect Enquiry
60 Hours of Partner time or £6000 Max payout, Excess 2 hours of Partner Time


What's not Covered
Late Returns
Current enquiries
Fraud (SCO or National Investigations Service)
Taxes Fines Penalties, compensation or damages
Criminal Prosecution
Bankruptcy
Liquidation
Receivership

Benefits
Inclusive Business Support Help line available to both your practice and your Clients (at your discretion)
All advisers in house (16)
Employment Law
Health & Safety
Commercial Law
Monday to Friday 9-5
No Restrictions in number of calls

Other Benefits
Pro rata premiums available for late joiners of voluntary (client decide) schemes to a minimum of 2/12ths premium. Monthly declarations required.
No pre-acceptance issues on accepted claims for Full Enquiries (subject to claim form completion and return within 7 working days) we cover your time costs from the opening of the inspector's letter.
Fee notes DO NOT need to be signed by clients


If you would like contact details please PM me

Poodle

deanshepherd

Thanks for the info poodle.

How much does it cost?

claudialowe

I've gone with PFP on a "client decides" basis.

Premiums (premia?) are based on your practice profile - ie number of clients - sole traders, partnerships, ltd cos etc, and the number of enquiries your clients have had in the past.

The cover will pay up to £75K of accountants fees.

All that I had to do was to mail merge their standard letter (which I amended slightly) and sent them off to PFP. They then stuffed envelopes and sent them out for me.

I was happier doing it this way - I didn't want to force anyone into taking out the insurance, but at least they were aware that it is an option they ought to consider.

Claudia

Poodle

deanshepherd wrote: »

How much does it cost?

Le crunch. To start it is a £1K premium to me and as with Claudia joiners are per a practice profile.

I will be contacting my clients inviting them to join (I am NOT selling an insurance and so it is not a premium but a service charge) I will advise them how much, depending on their business entity and ask for a post dated cheque, say to the 1st June, that will be my launch day, subject to sufficient client interest to cover my £1K premium. Anything over is profit:001_smile:

Glossy leaflets, literature etc are all provided free of charge by CCH.

I am not committing to pay anything and so if I do not have sufficient take up then It does not happen, If I do then I am able to pay the £1k interest free over 10 months.

I also like the idea that once in I have access to a team dedicated to HMRC enquiries and they will help me with any enquiries that may come my way.

Since I have been an MIP I have not had any enquiries on my clients (said that quickly so as not to temp fate!!) I have had a couple come in but none of my own, and so that sort of support would be a comfort.

Poodle

claudialowe

For my clients -

full enquiries, VAT, PAYE/NIC and IR35:

Sole traders, p'ships and ltd cos t/over upto £350K = £125.00

As above to include aspect enquiries = £150 for s/traders and £185 for p/ships and ltd cos.

It then goes up £350K - £1m = £175 and then on up in £1m increments.

Some of them have called me about this, and I have just said it is like any other form of insurance - and that personally I think £150 for full cover for full or aspect enquiry is going to be considerably less than my bills :thumbup:

The enquiry that I handled last year which only resulted in £400 extra tax cost my client over £1500 in my fees. If someone else was footing the bill we might well have carried on haggling - HMRC suggested a 100% addback on a particular item, and we finally settled on 25%!!!!!!!!!

Personally I wouldn't like to fork out £1K and then know that I had got to recoup that cost somehow, and feeling pressured to make the clients join the scheme.

I think that I get 10% commission on each policy sold, so it will never be a revenue stream as such - but that doesn't bother me - I would prefer to know that they have had the option and it is up to them - if they don't take out the insurance they can't whinge about my fees if they do get investigated.

Claudia