Tax Disputes & Investigations
HMRC Compliance Checks Visits to Business Premises
Visits to Business Premises (Pre-Arranged & Unannounced)Every year HM Revenue & Customs (HMRC) undertakes 'Compliance Checks' of Individual, Partnership and Company Tax Returns to ensure those taxpayers are paying the correct amount of tax and claiming the right amount of allowances and reliefs. Ordinarily, a Compliance Check will only to be carried out when HMRC has identified a 'risk' in a taxpayer's tax position (or self-assessment of tax). Nowadays, HMRC carries out very few random checks. On this page:
Has HMRC the power to visit business premises? HMRC can visit your business premises either by way of an appointment or unannounced. Its purpose is to look at your business premises and/or assets and to learn more about how your business operates. If you run your business from home, HMRC can enter those parts of your home that are used for business purposes – nowhere else! [Top] Normally, HMRC will contact you by telephone or in writing to arrange a visit – usually with at least 7 days notice. If you have a professional advisor, HMRC may also contact them about the visit. Your professional advisor is entitled to be present at a HMRC visit. We recommend having a specialist advisor on site to help manage and control the visit. HMRC is prepared to review your records at either your advisor's offices or at a HMRC office – these options are often far more favourable than allowing a visit to your premises. If you do not want HMRC to visit your business premises, you must inform HMRC and make strong, well-argued representations as to why the records review should take place elsewhere. Specialist advice in the area can be invaluable. If HMRC still insist on visiting your premises, it can apply to an independent tribunal for approval. If the Tribunal approves HMRC's request, HMRC will contact you again to give you at least 7 days notice of when the inspection will take place. However, HMRC can turn up announced! HMRC do try to review all the relevant business records everything during one visit. However, it can (and does) often need to take away some records to complete its inspection. Full details of what records HMRC does take away should be kept and we also recommend that HMRC be asked to copy every document they remove so that you retain a copy on site. Normally, HMRC will not need to speak to your employees other than, perhaps, your payroll and/or finance staff. Careful consideration needs to be given to such a request. We recommend that a specialist advisor is present at any meetings/discussions with staff. If HMRC needs to look at business assets that are away from your offices or business premises, it may need to arrange a further visit. If an independent tribunal approves a HMRC visit and you refuse to let HMRC carry out its inspection you may have to pay an initial £300 penalty. Further penalties of up to £60 per day can be charged until you allow HMRC to carry out its inspection. If you have a reasonable excuse for not allowing HMRC to carry out an inspection approved by a tribunal (e.g. you are seriously ill, someone close to you is dying etc) then you must inform HMRC. If HMRC accepts your excuse as reasonable, a revised date will be agreed. [Top] A 'Notice of Inspection' – approved by either a senior HMRC officer or an independent tribunal – legally authorises HMRC to make a visit without prior notice. This can happen if previous appointments to visit have proved unsuccessful, when HMRC has not been able to contact you to arrange an appointment or where HMRC has identified concerns that it feels can only be addressed by an unannounced visit. The Notice explains the inspection rules, including what the named HMRC officers are actually allowed to inspect during the visit. If an independent tribunal approves such a visit and you refuse to let HMRC carry out its inspection you may have to pay an initial £300 penalty Further penalties of up to £60 per day can be charged until you allow HMRC to carry out its inspection. You do have the right to be represented at such a visit and the right to consult your advisor. Anyone who receives an approved unannounced HMRC visit should seek specialist advice immediately. [Top] What should I do if I receive a pre-arranged or unannounced visit? If you receive notice of either a pre-arranged or unannounced visit you need to consider the following points:
[Top] If you are contacted or challenged by HMRC, the best thing you can do is the 'right thing; the worst thing you can do is nothing. OneE TDI will help you make the right decisions. [Top] If you would like a free, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the form below. Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters. [Top] |
