Tax Investigation Insurance - And Fraud

[SamDineWithMe]

If someone has tax investigation insurance, and they committed fraud, or did not tell the HMRC about something that raises tax liability, does that insurance become invalid? I am guessing that if you had tax investigation insurance and they underwrote costs to defend yourself against an enquiry for deliberately misleading the taxman, then they would be aiding and abetting in the crime.

[AvocadoK]

None of the policies for fee protection insurance that I have come across would cover fraud cases.

However, 'not telling HMRC something that raises the tax liability' is not always fraud. It could be negligence or carelessness. In those cases, policies would pay up (assuming all other policy conditions are met).

AK

[Generix]

Depends....don't think any legit insurer would insure you for intended fraud...

However I'm sure you could get insurance, for example, against an employee responsible for taxes in the company committing a fraud.

If that makes sense?

[wamstax]

My question would be would the insurance company ever find out. Clearly if the enquiry was detailed as being from SCI or Taxes Criminal Unit or any Civil Investigation of Fraud team and they were getting copy letters going to those offices the company would have a fair idea that the HMRC suspected you of fraud. I have only in my 6 years ever come across two clients who were covered for insurance with enquiries being made from one of those offices but I cannot now recall the company concerned.
I suppose it would be possible to get insurance under some circumstances but I have seen terms that specifically exclude cover on COP8 and/or COP9 enquiries