Guide
Tax investigation insurance: what fee protection actually covers
Updated
The most useful fact about fee protection insurance: many people already have it inside their accountancy package and don't know. The second most useful: it pays your adviser's fees, never your tax.
What it is and isn't
- What it covers
- The professional fees of responding to an HMRC enquiry: your accountant's or a specialist's time for correspondence, meetings and negotiation. With full enquiry fees commonly £1,500–£5,000+ (typical 2026 quotes), this is the exposure it removes.
- What it never covers
- The tax itself, interest, or penalties. If an enquiry ends with more tax due, that bill is yours regardless of any policy; the insurance only stops the cost of getting there being added on top.
- Common exclusions worth reading
- Policies commonly exclude enquiries already open when cover starts, returns filed late, and fraud cases (including Code of Practice 9). The exclusions page is the policy; read it before relying on it.
How it's sold, honestly described
- Bundled with accountancy packages: many firms include fee protection in their standard monthly fee, backed by an insurer. If you have an accountant, ask what is already included before buying anything.
- Standalone policies: available for individuals, landlords and companies without an accountant's scheme; pricing is commonly modest per year, and varies enough that quoting a figure here would be guesswork.
- Through memberships: some trade bodies and landlord associations include or discount cover; worth checking existing memberships before paying twice.
Is it worth it?
It is insurance, so the honest frame is exposure: enquiries are not rare, most are routine, and representation for a full enquiry costs real money. If a surprise £1,500–£5,000 fee would genuinely strain you, cover is rational; if you could absorb it, and your affairs are simple enough that an aspect enquiry is the likely worst case, self-insuring by simply keeping good records is also rational, and a simple aspect enquiry is one you can often handle yourself. What the decision should not be driven by is fear: an enquiry letter is not a disaster, with or without a policy.
If you are already under enquiry, insurance bought now will not cover it; go straight to comparing representation fees. Nothing here is financial or tax advice, and policy terms differ; the policy document governs.