Tax Investigation Service: What HMRC Enquiry Protection Covers in 2026
One HMRC enquiry into a single tax return ran for two years, generated request after request for information, and ended with no change to the return at all. The client had done nothing wrong. The accountancy fees to prove it came to £19,000, and under the fee protection scheme we use they were paid in full.
Our Tax Investigation Service renews on 1 October 2026. HMRC enquiry activity has risen sharply and we have made claims on behalf of our own clients over the past twelve months, so this year we want to explain plainly what the service does, what it costs and how to join before the new period of cover begins.
Why HMRC might pick you
HMRC estimates the gap between the tax it should collect and the tax it does collect at £59.2 billion for 2024/25, and it attributes 62% of that, some £36.7 billion, to small businesses. That is where its compliance effort is aimed. Its Connect database matches your return against bank data, Land Registry records, card transactions, DVLA, council tax, VAT registrations, Airbnb and even social media, and a mismatch is enough to prompt a letter.
Some enquiries follow a late return or a cash based trade. Some are entirely random. HMRC can open an enquiry within twelve months of the filing date without giving a reason, and can normally look back four years, six where it considers an error careless and twenty where deliberate. Being selected is not an accusation, but it does need a proper defence.
What a defence costs
A VAT inspection at a client’s premises, one meeting plus follow up letters, came to £3,400 in fees. A six month Construction Industry Scheme enquiry into a scaffolding firm cost £2,400 to defend and ended with HMRC paying the client a refund. Research and Development claims are under particular scrutiny at the moment and the average cost of defending one is around £3,000, with some running to tens of thousands. In every one of those cases the fees were met in full by the scheme, and in none of them did the client owe more tax at the end.
Those hours are chargeable whether or not HMRC finds anything, and they are not part of our normal annual fee.
What the Tax Investigation Service covers
Membership covers our professional fees, up to £100,000 per claim and with no excess, when we act for you in any HMRC compliance check, visit or enquiry. That includes corporation tax and Self Assessment enquiries, VAT and PAYE compliance visits, IR35, CIS, National Minimum Wage, Capital Gains Tax, Inheritance Tax, Stamp Duty Land Tax and P11D enquiries, and HMRC information notices under Schedule 36.
We deal with HMRC from the first letter onwards, prepare every response, attend every meeting and negotiate any settlement, for as long as it takes. For limited company members, cover extends to the directors and their spouses or civil partners where we prepare their personal tax returns too, subject to the scheme’s conditions.
The service is backed by an insurance policy we hold with Croner-i, one of the UK’s leading providers of fee protection, trusted by more than 30,000 businesses. You deal only with us; the insurance sits behind the scenes.
The part members use most: My Business Hub
Every member also gets free access to My Business Hub and its telephone advice lines for employment law, HR, health and safety and commercial legal matters. That means a real adviser on the phone when a member of staff goes off sick long term or a disciplinary needs handling properly, plus a library of contracts, handbooks, policies and risk assessments. For a business without an HR department, this alone is worth the membership.
What it does not cover
The service pays our fees. It does not pay any additional tax, interest or penalties HMRC establishes are due, and it does not cover enquiries that were already open when you joined, tax avoidance schemes, or deliberate omissions. We would rather say that plainly than have anyone surprised later.
What it costs in 2026
Membership starts from £75 plus VAT per year, with the price depending on the size and type of your business. Set against the examples above, that is a fraction of a single day of enquiry work. If you would like a quote for your circumstances, ask us and we will confirm the figure before you commit.
Existing members: what happens next
If you are already a member, your cover renews automatically on 1 October 2026 and your invoice will follow on that date. If you no longer want to be included, reply to our renewal email by Monday 28 September 2026 and we will remove you.
Joining before 1 October
Cover cannot be added once HMRC has written to you, so the time to decide is now. If you are a client and not yet a member, reply to the renewal email or call us on 01993 225030 and we can add you in a few minutes so that cover starts with the new period. We provide the service for clients across the county, whether you use our accountants in Oxford or Bicester or work with us remotely.
If you are not yet a client, the service comes alongside our year end accounts and tax advice work; see the full range on our services page or read our 2025 post on the Tax Investigation Service. If you want to talk it through, book a call and we will tell you exactly what it would cost for you.