How to do a compliance check: establishing the facts: when a visit may be needed
A visit can enable an officer to see how a business operates and to talk to the relevant people in the business to determine what information and level of checking is needed to establish the liability to tax or duty.
A visit will usually involve an examination of business records and often an inspection of business premises and/or goods and/or assets.
Sometimes it is necessary to carry out an inspection without giving prior notice, using powers within FA08/Sch36, so that records, assets or business activity cannot be concealed, see CH254000.
Visits are the usual practice for VAT, Employer Compliance and excise compliance checks.
Risk and Intelligence teams select the small and medium enterprise businesses that need to be visited by a Local Compliance officer.
Large Business Service officers also regularly visit their customers to carry out their compliance checks.
Visits are less frequently done for Small Medium Enterprises (SME) income tax, corporation tax and capital gains tax compliance checks, which are more usually done by asking for documents and information to be sent to an HMRC office.
However, a visit may be considered appropriate for these compliance checks in the following circumstances
- if it is convenient for you and the person that you see the business records where they are normally kept
- to inspect business assets, including stock
- to identify ghost or moonlighting businesses, see CH21680
- where deliberate understatement is suspected and an inspection is necessary to obtain the evidence
- where a business has failed to cooperate with attempts to complete the compliance check by correspondence
- to carry out credibility checks.
A visit must not be made to a person’s home unless they request it, or parts of the home fall into the definition of business premises, see CH25180, and you have established a reasonable requirement to enter and inspect them or any assets or records that may be there.
All visits involving an inspection of premises, assets or records using the powers within FA08/Sch36 must be arranged and conducted in accordance with the guidance at CH250000.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)