Tax fee protection insurance UK: cover for HMRC enquiry costs

What tax fee protection actually covers

When HMRC opens an enquiry — into a Corporation Tax return, a Self Assessment return, a VAT period or a payroll — the work of responding falls to your accountant. Letters have to be answered, records assembled, computations defended and meetings attended. That work is chargeable time, and it sits outside the fixed fee most businesses pay for annual compliance work. Tax fee protection insurance (also sold as “tax investigation insurance” or “fee protection”) picks up those professional fees so the enquiry does not become a second bill on top of any tax at stake.

Two points matter at the outset. First, the policy pays fees, not tax: no insurance can pay tax that is lawfully due, and none should claim to. Second, the cover is about defence, not concealment — it funds proper professional representation so that HMRC’s questions get answered accurately and your position is put properly. Deliberate fraud is not insurable, and policies carve it out explicitly.

Who buys it

Anyone HMRC can enquire into, which is to say anyone who files a return: limited companies, sole traders and partnerships, landlords with property income, contractors and consultants, and private individuals with Self Assessment affairs. Many accountancy practices offer a scheme to their whole client base; individuals and businesses whose accountant does not run a scheme can buy the same protection directly online.

Random or risk-triggered — you cannot opt out of either

HMRC enquiries are opened for two broad reasons. Some are risk-triggered: something in a return, or a mismatch against the data HMRC now receives automatically from banks, letting platforms, card processors and overseas tax authorities, prompts a closer look. Others are effectively random or campaign-driven — a sector or a relief HMRC has decided to test. Being selected is not an accusation, and a clean return is not a shield against selection. That is precisely why the fee exposure is worth insuring: you can run your affairs impeccably and still spend heavily on professional time proving it. If you are unsure how your own filings look from HMRC’s side, that is a conversation for your accountant — this page is general information, not tax advice.

What a Solar Protect policy covers

The cover available through Solar Protect provides up to £100,000 of accountants’ fees, with no excess, using your own accountant. Directors and partners are included, subject to the policy limits. The insured events include:

• Corporation Tax and Income Tax enquiries — full enquiries and aspect enquiries
• PAYE/NIC compliance checks and disputes
• IR35, Employment Status and CIS enquiries and disputes
• VAT compliance checks and disputes
• Section 60/61 VAT Act 1994 enquiries (provided there is no dishonesty or fraud)
• Code of Practice 8 investigations (provided there is no dishonesty or fraud)
• Schedule 36 Finance Act 2008 record checks and inspections
• Up to £250 towards informal HMRC information requests
• Inheritance Tax and probate return enquiries, and Stamp Duty Land Tax enquiries
• National Minimum Wage / National Living Wage enquiries
• Child Tax Credit, Student Loan and Gift Aid enquiries
• Companies House confirmation statement enquiries

As with any policy, the full wording governs what is and is not covered — read it alongside the summary before you buy.

How to buy

There are two routes. You can quote and buy online within minutes through Solar Protect, which is part of the same group as Apex. Or, if your accountancy firm runs a fee protection scheme, you can join through them — many practices offer exactly this, and Solar also provides schemes to accountants (see our page for accountancy firms).

Where to go next

This is the hub page for our fee protection cluster. The detail lives on four companion pages: what an HMRC investigation costs in accountants’ fees, IR35 enquiry insurance, VAT compliance checks and insuring the cost, and fee protection schemes for accountancy firms.

Frequently asked questions

Does tax fee protection pay the tax HMRC says I owe?

No. Tax that is lawfully due can never be insured. The policy pays the professional fees your accountant charges for handling the enquiry — correspondence, computations, records work and meetings — up to £100,000, with no excess.

Can I use my own accountant?

Yes. The Solar Protect cover is written so you use your own accountant, the person who already knows your affairs, rather than a panel firm appointed by an insurer.

Are directors and partners covered?

Yes, directors and partners are included, subject to the limits set out in the policy. Check the wording for exactly how the limits apply to your situation.

I've done nothing wrong — do I still need it?

A significant proportion of enquiries are random or campaign-driven rather than triggered by anything suspicious, and a compliant taxpayer still has to fund the professional time it takes to demonstrate compliance. Fee protection exists precisely for that gap.

Does it cover fraud investigations?

Deliberate fraud is not insurable. Section 60/61 VAT Act 1994 enquiries and Code of Practice 8 investigations are covered only where there is no dishonesty or fraud.

How do I buy it?

Either online through Solar Protect — quote and buy within minutes — or through your accountant if their practice offers a fee protection scheme.

Solar Protect is a trading style of Solar Insurance Services (Medway) Limited, authorised and regulated by the Financial Conduct Authority (FRN 459582), and is part of the same group as Apex Insurance Brokers.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.