PCG membership after closing the company

[ramap]

I will be closing down my company next month and so I decided not to renew my PCG membership this time. but I got an email from PCG saying that I may be investigated by HMRC upto two years after company closure. Is it really worth having this membership even after closure? I am with one of the reputed accountancies and always followed their advice and so I don't see any reason why I will be investigated. Here is the text from their email
"For your information in case you are not aware you can be investigated
up to two years after company closure, your membership does include PEI
Insurance (tax investigation insurance) and in the unlikely event that
you are investigated by HMRC, the membership would cover you up to
£75,000 per claim to cover any professional fees, i.e. accountants fees,
legal fees, etc. Please see attached Membership Policy Advice produced
by Abbey Tax Protection (providers of the PEI insurance)."

if it is really worth going for this membership, then should I go for standard or premium membership? Please suggest. Thanks in advance.

[Waldorf]

I would have thought that a HMRC investigation would be unlikely after your company has been struck off, after all it will be "dead" so nothing to investigate?

[malvolio]

]How many more times.. .

Investigations are primarily triggered by your SAR. Since SARs obviously run in arrears, you can be caught up in one up to a year after the tax year end. And cince yo will fill out an SAR at the end of the year following the closedown, you get a two year window to cover. So two trailing years of cover is almost a necessity.

So two years at £120 pa is not a life-threatening expense, but gives you adequate cover. JFDI

[Waldorf]

I think if you have done everything by the book then you should be ok to drop the cover, HMRC would not be able to raise anything into your company after it has been closed down, yes they can look into your tax return but provided you have accurately recorded your salary, dividends etc I do no think you would have anything to keep you awake at night.

[malvolio]

I think if you have done everything by the book then you should be ok to drop the cover, HMRC would not be able to raise anything into your company after it has been closed down, yes they can look into your tax return but provided you have accurately recorded your salary, dividends etc I do no think you would have anything to keep you awake at night.

Wrong. the company isn't the issue. An inquiry into your personal tax affairs can start up to two years after you close the company, simply by the way the timings of the self assessment system works. If it does, you need the PEI cover.

Put it another way - £240 to protect £15,000. It's not hard.

[richy]

"may be investigated by HMRC upto two years after company closure"

Fear, and the power of nightmares; some firms thrive of it, and generate quite a turnover.

I pinched that line from Adam Curtis

The Power of Nightmares - Wikipedia, the free encyclopedia

Anyone want any lawn insurance? I'll offer to insure that if your lawn dies, which it may, I will replant it. Policy cost per annum, £300. don't have nightmares, pay up!!

[Waldorf]

Wrong. the company isn't the issue. An inquiry into your personal tax affairs can start up to two years after you close the company, simply by the way the timings of the self assessment system works. If it does, you need the PEI cover.

Put it another way - £240 to protect £15,000. It's not hard.

I agree that £240 is not a lot to worry about, but personally I would not bother with this insurance if I closed my company.

I am happy that I have nothing to worry about with my personal tax return.

[ChimpMaster]

I agree that £240 is not a lot to worry about, but personally I would not bother with this insurance if I closed my company.

I am happy that I have nothing to worry about with my personal tax return.

I probably would continue with the insurance, but it's a personal choice for each individual.

I am confused on one point though - if HMRC investigate your personal Tax Return, what exactly would they be going for, considering that the Ltd company is closed? Could they still aim to apply IR35?

[malvolio]

I probably would continue with the insurance, but it's a personal choice for each individual.

I am confused on one point though - if HMRC investigate your personal Tax Return, what exactly would they be going for, considering that the Ltd company is closed? Could they still aim to apply IR35?

Yes. IR35 is a personal tax, albeit one paid by your company. If the company no longer exists, the liability falls to you, if you are challenged and if you lose the case for not having professional representation on tap...