Talking Tax: July 2022
Author: Mike Scales, TFPI Director
The July 2022 review reveals the ongoing changes within the four main providers in the TFPI arena; Croner Taxwise, Markel Tax, PFP and Vantage Fee Protect. There are several other additional providers and insurers, but they collectively only insure just 11% of the primary accountancy practice market.
Ongoing changes in the TFPI market
An interesting statistic of the market share of the main TFPI insurers shows that out of the circa 43,250 registered accountancy practices in the UK, 39,290 are VAT registered. These practices are most likely to be the primary TFPI target market. Of those, just under 30%, circa 11,550 of them, have a TFPI scheme of some sort.
It is estimated that up to 20% of the total registered accountancy practices are in the private practice sector or are dormant / semi-retired practitioners, and as such, wouldn’t be included as primary TFPI scheme targets. This leaves circa 23,000 uninsured practices.
Of the circa 11,550 insured practices / practice schemes registered, the following market share per specialist TFPI insurer is:
|Croner Taxwise||39%||– Steady, minor growth. Retention claimed at 95%.|
|PFP||20%||– Steady, minor growth. Retention claimed at 97% but likely to be 90%.|
|Markel||15%||– Losing clients, no discernible new business. Retention claimed at 97% but likely 85%.|
|Vantage||15%||– Steadily gaining new clients. Retention 95%.|
|All Others||11%||– Steady, no discernible growth. Likely retention circa 90%.|
Do note that market share does not always, if ever, relate to best policy, services or administration of the TFPI scheme. That is another equation completely, which we will cover to some degree in another newsletter.
There are still many accountancy practices that do not offer a scheme, with circa 53% of the available market putting their clients at risk of additional costs or undefended enquiries or dispute actions from HMRC.
HMRC Increasing Their Activity
It has been well advertised that HMRC has increased their dedicated enquiry teams by some 1,200+ technical inspectors and an additional £100m in funding. They are also chasing the deemed “tax gap” of some £35 billion with some gusto.
The expected increase in claims continues to come through the insurers as a matter of process by the HMRC compliance and enquiries regimes, especially in light of the Governments need to recoup some of the various £350+ billion Covid business assistance schemes, many erroneously granted in the first instance, if the latest media reports are to be believed.
A very recent review of two of the mainstream TFPI insurers claims analysis has not only shown an increase in the volume of TFPI claims coming through, but also the value of such claims. There is also an increase in the types of claims i.e. more IR35, National Minimum Wage and SEISS, enquiries, to name a few. The hyper vigilant attitude to the overbearing volume of “specialist consultancies” and their tax rebate claiming methodology being under scrutiny by HMRC also continues. The expectation is that this trend will continue exponentially in the next few years.
Take Action . . .
Zeal TFPI is a specialist consultancy providing technical and market comparisons in the tax fee protection insurance arena exclusively for accountancy practices.
So, if your practice is one of the practices that do not have a TFPI scheme in place, start to do something positive about fixing that status . . . for your and your clients’ benefit.