HMRC's continued focus on improving its collection efficiency of VAT and other business taxes has resulted in an increase in the number of visits HMRC officers are making to businesses. To assuage your anxieties, we’ve put together some information to help you handle a VAT visit.
Will I be notified about the visit?
You will normally be informed and able to arrange a convenient date and time for their visit. You may be asked for records to be made available or even to send certain information in advance. Rarely an unannounced visit will occur but that would indicate an investigation is underway.
Why are VAT officers visiting my business?
There are numerous reasons for a visit but it is usually for something in particular, for example:
- You work within a sector HMRC has identified as one of risk;
- Your VAT returns have failed the VAT Central Unit’s credibility check;
- HMRC has received or gathered information concerning your business;
- To verify your suppliers and customers for correct VAT claims;
- You have a history of non-compliance.
HMRC VAT officers, more than other tax officers, in the past have tended to take an interest in how businesses are run.
What records should I provide to VAT officers?
The VAT officers will inform in advance about the documents that they wish to check; generally, these records will be day-to-day business records. VAT officers would want to verify the figures declared on the submitted VAT returns. You can ask for details of any specific records you should have ready beforehand.
Do I need to be present when they visit?
Yes, you should be present during a visit as you are the owner of the business. If there is someone else who manages your VAT then it is advisable that they are present but you should be available to respond to queries.
Can a VAT officer take my records away with him?
A VAT officer can ask for copies of documents at a time of a visit or if they want to examine your records in detail at their offices. A VAT officer is entitled to take only the documents which they have examined or you have presented and can only remove them at a convenient time. If they take the original documents, you should take a detailed receipt of the documents taken. However, if they ask to remove documents, then you should seek advice from us immediately. You have the right to suspend the visit while you seek further advice.
What happens after a VAT visit?
The VAT officer should discuss any issues or concerns they have at the visit, particularly if they feel there is VAT due. They will also write to you and advise if they are going to issue an assessment for unpaid or over-claimed VAT and also detail the penalty. If you disagree with this you should a qualified accountant immediately.
What should I do if I receive a VAT assessment?
The VAT officer will send a letter explaining the reasons behind the assessment. You can agree to pay the amount or dispute it and ask for a review which may eventually lead to a Tribunal appeal. You should take professional advice at this stage and should not delay in appealing as it is governed by time limits.
You may face a penalty in addition to the assessed amount which will depend upon whether the HMRC considers you made a mistake or your actions were deliberate. If you are affected or concerned about an HMRC VAT officer's visit, call our team of experts today on 020 8303 1287.