Fee Protection Insurance

T.C.

I have just received some paperwork through regarding fee protection for clients, insuring them against costs of an HMRC enquiry. Does anyone else recommend this to their clients? Views on it appreciated!

AK002

We do, we use Abbey for it. Its for tax enquiries yes?

T.C.

Yes, that's right. I will get a quote for it - no harm in that I suppose.

deanshepherd

I have been speaking to all the main providers over the past two weeks (Qdos, Abbey, PFP, Copperfields etc.) and have today signed up with Qdos.

Drop me a line if you want to have a chat about any of them.

Also, be prepared to make them reduce their initial quote to you - they are an insurance company after all!

monkeypuzzle47

i am thinking about offering this now. Do we get a commission? How does it all work.

deanshepherd

Basically, unless you are CCAB qualified or otherwise FSA authorised, it is you that is insured. Your client then pays you an annual fee for a tax enquiry 'service' (as oppose to their own insurance policy).

The insurance company (Qdos, Abbey, PFP or whoever) will quote you either a full practice fee (whereby all your clients are covered under the scheme) or a client decide fee whereby they charge you £x per sole-trader, partnership, limited company or private client that signs up for your 'service'.

You then get to choose how much you charge your clients for the service. Therefore you effectively decide upon your own level of commission by pocketing the difference.

I was told about 20% take up on a client decide basis is about the average. My scheme starts on Thursday and so far only about 5 have signed up for it so don't be expecting a big money spinner!

monkeypuzzle47

thanks dean for that information. I will shop around.
I was starting to wonder whether it was compulsary that we offer this service.

T J

I was wondering whether to offer it, and if it is compulsory.

Do the more experienced MIPs think it worthwhile? Do you get many investigations?

Thanks

deanshepherd

It's not compulsory but ICAEW do state that it's 'best practice' to make clients aware of the availability of such policies.

It was just about worth the effort financially but I think some clients see it only as a money making venture for us and the insurers.

As for numbers of investigations? I can count them on one hand for the past 5 years..

Monsoon

We signed up with PFP and have had a take up of about 7% or so.
So far no documentation or anything has arrived, which is a little bad. Client signups were months ago and we haven't had to had over the premiums yet. Rather odd.

We had a fair few clients ask up about it, which is why we decided to offer it, and spoke to someone from PFP having read a post on here recommending them.

I think I looked at one of the others (Qdos?) but they were looking for a minimum fee from us of £1000 regardless, which was crazy.

deanshepherd

I'm with Qdos and there is no mimimum fee. (I think it is Abbey that have a minimum).

I was deciding between PFP and Qdos and I went with Qdos because they came highly recommended to me and offered a much better deal.

When I told the sales guy at PFP that I had chosen Qdos he was very rude and suggested I was thinking only of my own profits and not the needs of my clients - bit rich from an insurance salesman!

Take up in the end was 15% at a fee of £120 per client.