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Tax Defence POLICY OF INSURANCE This is a ‘claims made’ insurance which covers only claims or proceedings notified during the Period of Insurance Whereas the Insured has submitted a written proposal and declaration or renewal declaration to the Insurer it is agreed this shall be the basis of, and be incorporated into this Policy. The Insurer, Brit Insurance Limited, agrees to indemnify the Insured to the extent and in the manner provided within this Policy. DEFINITIONS Any One Claim All claims consequent on the same original cause or event shall be regarded as one claim including a Full Enquiry into a later year’s Self Assessment Return where a previous year’s Self Assessment Return is still subject to an open Enquiry Accountancy Insurance Services A trading division of IMCG Europe Limited, Barn Close, 12 Lambridge, Bath, BA1 6BJ which specialises in the provision of insurance services to the accountancy profession and to accountants in practice Designated Agent The consultancy service, as named on the Schedule to this Policy, who are appointed by Insurers to act for the Insured in accordance with the terms of this Policy Insured The company, firm, partnership, organisation or individual who has subscribed to Tax Defence arranged through Accountancy Insurance Services Insurer Brit Insurance Limited, 55 Bishopsgate, London, EC2N 3AS. Insurers’ Agent The intermediary, as specified on the Schedule to this Policy, which administers Tax Defence including Claims Settlement on Insurers behalf and to whom any notification of claim must be addressed HMRC Investigations (i) Business Full Enquiry The investigation which takes place when an officer of H M Revenue & Customs (“HMRC”) makes a request to examine all of the business books and records and issues a formal Notice under S9A or S12AC of the Taxes Management Act 1970 or under Paragraph 24(1) Schedule 18 Finance Act 1998 (ii) Personal Full Enquiry The investigation which takes place when an officer of HMRC issues a formal Notice under S9A of the Taxes Management Act 1970 to make a Full Enquiry into the non-business affairs of a declared director of an Insured, for example into rental income and/or interest received. This will be accompanied with a request to examine all of the prime documents (iii) Employer Compliance Dispute The enquiries which take place following an expression of dissatisfaction with the Insured’s PAYE, and/or NIC affairs following an employer compliance visit by HMRC or following an expression of dissatisfaction with the Insured’s P11Ds or P9Ds Period of Insurance The period for which Insurers have agreed to provide this insurance, as shown in the Schedule Professional Expenses Any fees, expenses and other disbursements reasonably incurred by the Designated Agent in connection with any claim or proceedings including those incurred by Insurers in connection with such claim or proceedings Territorial Limits The jurisdiction of the revenue authority conducting the dispute or investigation must be within the United Kingdom of Great Britain and Northern Ireland excluding the Isle of Man and the Channel Islands VAT Disputes The enquiries which take place following a written decision, assessment or statement of alleged arrears made by HMRC into Value Added Tax and/or Value Added Tax default surcharges and misdeclaration penalties COVER Insurers agree to indemnify the Insured against Professional Expenses incurred by the Designated Agent by reason of any HMRC Investigation or VAT Dispute against the Insured within the Territorial Limits and notified to the Insurers’ Agent during the Period of Insurance in connection with: Section 1 - HMRC Investigations Correspondence, discussions and meetings with the Insured and on the Insured’s behalf in order to respond to HMRC’s requests and allegations Section 2 - VAT Disputes Correspondence, discussions and meetings with the Insured and on the Insured’s behalf in connection with the local review procedure in order to reach agreement with HMRC and preparation and representation of the Insured at a VAT and Duties Tribunal. LIMITS OF INSURERS LIABILITY The maximum liability of Insurers under this Policy in respect of Any One Claim and in aggregate for any one Insured in the Period of Insurance shall be limited to £75,000. EXCLUSIONS Insurers shall not be liable to provide indemnity hereunder in respect of 1. any claim made, brought or commenced outside the Territorial Limits 2. Professional Expenses incurred before the written acceptance of a claim by Insurers or their agents 3. any cause or event occurring prior to or existing at inception of this Policy or at the time the Insured subscribed to Tax Defence which the Insured knew or ought reasonably to have known was likely to give rise to a claim under this Policy 4. an enquiry under Section 60 of the VAT Act 1994 or matters handled by Special Civil Investigation offices, Criminal Investigation offices and/or situations where Code of Practice 8 or Code of Practice 9 leaflets are issued 5. the defence of any criminal prosecution 6. any dispute arising under the National Minimum Wage Act 1998 or the Tax Credits Act 2002 7a. any claim made where Self Assessment Returns are submitted outside the statutory time limits and/or in a penalty position under S7 and/or S93 of the Taxes Management Act 1970 or under Part II Schedule 18 Finance Act 1998 7b. any claim made where a Return submitted at the final filing date contains provisional figures in respect of all of the trading income and expenditure items an investigation arising out of a voluntary disclosure made to HMRC in respect of omitted tax, NIC or VAT liabilities taxes, fines, interest or any other duties or penalties imposed or assessed upon the Insured 10. any claim where the Insured is entitled to indemnity under any other policy or certificate 11. the preparation of Self Assessment Returns, accounts, P11Ds, P35s, VAT returns or any other statutory returns 12. the Professional Expenses incurred in respect of any HMRC Investigation into a tax planning arrangement where the Anti Avoidance Intelligence Unit of HMRC has allocated a number for inclusion on the relevant Self Assessment Return. GENERAL CONDITIONS Due Observance The due observance of and compliance with the terms, provisions, exclusions and conditions of this Policy insofar as they relate to anything to be done or complied with by the Insured shall be conditions precedent to any liability of Insurers to make or continue to make any payment hereunder. Cancellation This Policy may be cancelled at any time on the written instructions of the Insured to the Insurers’ Agent at an address shown on the Schedule to this Policy and the premium shall be adjusted on the basis of Insurers receiving the pro rata premium less Insurers’ Agent’s administration charge save that there will be no refund of premium if the Insured has notified a claim to Insurers’ Agents during the Period of Insurance. This Policy may also be cancelled by Insurers giving 30 days notice to the Insured and the premium shall be adjusted on the basis of Insurers receiving or retaining pro-rata premium. Disagreements In the event of any disagreement between the Insured and Insurers both parties shall agree to the appointment of a suitably qualified referee to decide the matter. If there is no agreement on a referee, an appropriately qualified person shall be appointed by the President of the Chartered Institute of Arbitrators. The referee’s fees shall be paid by the party against whom the decision is made but if the decision is not clear the referee shall have the power to apportion costs. The Insured’s costs in preparation for and representation at meetings with the referee shall not be recoverable under this Policy. Insolvency of the Insured If the Insured becomes insolvent during the course of any claim or legal proceedings to which Insurers have consented Insurers shall reserve the right to withdraw that consent. The Insured shall be deemed insolvent upon the appointment of an office holder within the meaning given by Section 233(1) or 372(1) of the Insolvency Act 1986. Minimising Claims or Proceedings The Insured must use every endeavour and take all reasonable measures to minimise the likelihood of a claim being made under the terms of this Policy and use every endeavour and take all reasonable measures to minimise the cost and effect of any claim under this Policy. The Insured must give the Designated Agent full co-operation and information including a full and truthful account of the Insured’s affairs and all relevant documentary or other evidence in the Insured’s possession. The Insured must provide, obtain or execute all documents as necessary and attend meetings or conferences as requested. In the case of a corporate Insured, records and books of account shall be kept in accordance with the Companies Act 1985. CLAIMS SETTLEMENT CONDITIONS 1. Insurers Consent Insurers written consent must be obtained before incurring Professional Expenses. This consent will be given provided they are satisfied that there are reasonable grounds for representation of the Insured. Where the relevant authority issues a statement of alleged arrears, Insurers will give consent provided they consider there are reasonable prospects of disputing the revenue authority’s decision or allegations. In Employer Compliance or VAT cases a request for further information following an audit or control visit does not constitute a dispute; there must be a challenge into the Insured’s treatment of any tax, NIC or VAT matters. Insurers consent is an undertaking to provide indemnity to the Insured subject to the terms and conditions of this Policy and its Schedule but does not imply that all Professional Expenses will be paid. Routine presentation of the Insured’s affairs and expenses incurred which go beyond the immediate scope of the claim or proceedings fall outside the indemnity provided by this Policy. Consent shall be withdrawn and indemnity denied in the event of facts becoming known which show that a particular claim should not have been brought under the terms and conditions of this Policy and Schedule. If the Insured makes a fraudulent or false claim, this Policy shall become void, any premiums shall be forfeited and any indemnity paid shall be recoverable by Insurers. 2. Claims Procedure a. Duty to Notify Insurers’ Agents must be advised in writing immediately the Insured becomes aware of any cause or event which has or is likely to give rise to a claim under this Policy. Failure to notify during the Period of Insurance may lead to the claim not being admitted. b. Initial Consent In the event of a likely claim the Insured shall complete a claim form and send this to Insurers’ Agents together with all relevant information. After consideration of these documents Insurers’ Agents will advise in writing whether Insurers consent has been given. Where consent is given Insurers’ Agents will appoint the Designated Agent to act on the Insured’s behalf. On request the Insured will give to the Designated Agent any instructions necessary to secure the required access to relevant documents. c. Third Party Costs Any instructions given by the Insured to any party other than the Designated Agent shall be at the Insured’s own expense unless prior approval has been provided by Insurers’ Agents d. Settlement by Insurers Where Professional Expenses are likely to exceed the duties which are being claimed against the Insured, Insurers may pay the Insured a sum equivalent to the duties in lieu of Professional Expenses or further Professional Expenses. e. Payment of Designated Agent’s Bills Where Insurers’ consent has been granted, Insurers on behalf of the Insured will pay the Designated Agent’s reasonable costs. If the Insured is registered for VAT, Insurers will not pay the VAT element of any bills. f. Recovery of Costs Where it is possible to recover costs from the relevant authority following the successful defence of a claim, the Insured must take all steps necessary to recover costs paid or due to be paid by Insurers and must pass all such recoveries in full to Insurers’ Agents for Insurers. COMMUNICATIONS Initial notification of a claim must be made in writing by first class post or facsimile to Insurers’ Agents at the address stated on the Schedule (or endorsement thereon). All notices and communications from Insurers or their representatives to the Insured shall be deemed to have been duly sent if sent to the Insured at an address stated in the Schedule (or endorsement thereto). All notices and communications from the Insured to Insurers shall be deemed to have been duly sent if sent if sent to the Insurers or their representatives at an address stated in the Schedule (or endorsement thereto). COMPLAINTS AIS is dedicated to providing you with a high quality service and we want to ensure that this is maintained at all times. If, however, you are not satisfied with any part of the service you have received, then please contact us at IMCG Europe Limited, Barn Close, 12 Lambridge, Bath, BA1 6BJ. In the event you remain dissatisfied and wish to pursue matters further you may be able to refer the matter to the Financial Ombudsman Service. The Financial Ombudsman Service can normally deal with complaints from private individuals and from small businesses with an annual turnover of less than £1 million (for a group of companies, this means a group annual turnover of than £1 million). The Financial Ombudsman Service can also help with complaints from charities with an annual income of less than £1 million, and from trusts with a net asset value of less than £1 million. The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR Helpline: 0845 080 1800 Switchboard: 020 7964 1000 Website: www.financial-ombudsman.org.uk This procedure will not prejudice your right to take legal proceedings. Accountancy Insurance Services is authorised and regulated by the Financial Services Authority in respect of insurance mediation activities only. Brit Insurance Limited is authorised and regulated by the Financial Services Authority. |
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