Paul Crichton


This is a question that I get asked a lot at this time of year. One reason for this is because we issue our insurance renewals, but another is because clients are unsure if they are covered by other insurance products that they take out and whether they actually need the protection that we offer.


The insurance we offer is provided by Abbey Tax now renamed to Markel Tax. They have been providing and underwriting tax fee protection insurance for many years and have extensive experience in this market with a very straight forward claims process that does not require any action by the client. Your MMGA team will work on your behalf with Markel Tax to ensure any claims are intimated, managed and settled.


Some of our clients have other insurance that covers tax fee protection. The main difference is that they need to deal with the intimation of claims, manage the process themselves with their insurer and then settle our fees.


That’s the insurance administration side, but you might still be wondering: why do I need fee protection insurance?


HMRC have been opening more enquiries into tax returns to try and close the reported tax gap – the difference between tax declared and collected and what was expected by HMRC estimates. This activity is a combination of targeted campaigns in certain sectors, risk flags from returns filed and a random selection. Therefore, the chance of receiving an enquiry are greater than they have previously been. However being selected for an enquiry doesn’t mean that anything is wrong.


To illustrate that there may be nothing wrong, work still needs undertaken to convince HMRC of this fact as you need to prove your innocence to HMRC. Two cases in the last two years come to mind in which no additional tax was payable:

  • In the first case, HMRC issued their enquiry letter, we obtained all the facts from our client, set out our response and then sent if back to HMRC. Upon receipt of our response HMRC closed the case with no adjustments required. Thankfully the client had taken our fee protection insurance and therefore did not have to pay our fee of £1,200 + VAT.
  • The second case is still ongoing and has been open for two years. We have answered all HMRC’s questions, but they are still checking some matters before they, we expect, agree no adjustments are required. Again, the client took our fee protection insurance and have not had to pay any of our fees to date. The insurers have settled these to the sum of £2,800 to date.


Fee protection insurance is like all insurance we take out. It feels like a waste of money until you need to claim, at which point you are very grateful that you have it. If certainty and peace of mind are important to you, I would highly recommend taking out the fee protection insurance.


If you’d like to discuss your options and the associated costs, please contact one of our team.