Running your own business is exhilarating, offering you the freedom to do your own thing, be your own boss, and hire people to work for you. What I find with a lot of business owners is the key to success and expansion isn’t the great idea, it’s how the great idea is executed - and the key to that lies in looking after your finances.
For me, this means protecting what you’ve worked hard for, especially when the taxman throws you a curveball. Ensuring all your financial ducks are in a row can be stressful if you carry the worry yourself. Added to this stress can be the unwelcome presence of a random tax investigation. It’s HMRC’s prerogative to scrutinise your tax affairs and if all your T’s aren’t crossed or I’s dotted, and they target you, it can be costly to rectify.
Your financial affairs may well be in order, and you’ve paid your taxes diligently and faithfully, but HMRC’s computer can still choose you at random, and the taxman has you under his microscope. It’s confusing and worrying to think that suspicious eyes are on you, especially when it becomes clear that everything’s in order. Nevertheless, HMRC’s wheels are in motion and what a lot of people don’t realise is that they don’t stop until the investigation is complete. If there’s anything untoward to be found, even down to basic human error, they will claw it back from you. This approach earned the government an eyewatering £34.1 billion last year alone, and the spiralling costs of Covid on the public purse means added pressure on government spending, so more chance of the random investigations increasing.
I won’t lie to you, even if you might have little or nothing to pay the taxman once the investigation is complete, if you’re paying your accountant an hourly rate, the fees will stack up. The process is time-consuming and complex; every detail is picked over and examined. It can be a worrying and distracting experience, and yet one small fee can go an exceptionally long way to keeping your profits where they should be – with you.
When you buy car, house, travel, or pet insurance, you hope that you’re never going to need it. You aren’t expecting or anticipating problems, but you’ve put your mind at rest knowing that should something require specialist help – through no fault of your own or because of simple human error – then you’re covered, and you don’t have to spend money to remedy it. Professional Fee Protection (PFP) works in the same way.
Possessing that PFP insurance policy gives you access to a top-notch financial defence team, covering all the billable professional fee hours necessary to work on the investigation on your behalf.
If the tax man targets you, a one-off PFP payment covers all your professional fees. Think for a moment what you pay hourly for straightforward accountancy advice, then think about the hours spent on the accountant’s clock ironing out tax issues HMRC has spotted. Having expert advice with calm and confident assurance is pure reassurance. Unlike car insurance you don’t have to have it – it’s optional - but trust me when I tell you it is worth every penny of that ridiculously small fee. In fact, the annual outlay for PFP is likely to be less than your car insurance!
If you are involved in a dispute with HMRC, having PFP will smooth out the bumps and help you reach a satisfactory conclusion, one that won’t leave you financially drained because of accountant’s fees. PFP isn’t punitive and what you get for that fee is priceless not just in cash terms but for peace of mind. We all need to be respectful and careful of our mental and our financial wellbeing. I believe that when you work for yourself and you’re responsible for the livelihoods of others, the two go hand in hand.
I see it like having a financial bodyguard who frees you up to get on with running your business while saving you thousands of pounds and the peace of mind that everything is in hand. This is when effective accountancy brings a whole new meaning to your financial wellbeing.
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