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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Information & Inspection Powers: Inspection Powers: Introduction

There are four different powers of inspection.

1. Business Premises

Where the inspection is reasonably required, see CH21620, for the purpose of checking a person’s tax position, see CH21540, an officer may enter that person’s business premises and inspect

* the premises, see CH25180 
* the business assets on those premises, see CH25260 
* the business documents on those premises.

The phrase ‘business documents’ has a narrow meaning, see CH25280.

An officer does not have the power to enter or inspect any part of premises used solely as a dwelling. CH25220 gives guidance where a business is run from a person’s home.

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2. Business premises etc of involved third parties

Where an officer reasonably requires an inspection for the purpose of checking the position of any person or class of persons regarding a relevant tax, the officer may enter business premises of an involved third party, see CH25360, and inspect

* the premises, see CH25180, 
* the business assets on those premises, see CH25260, and 
* relevant documents on those premises, see CH25360. 

The officer may exercise this power whether or not the identity of that person is, or the individual identities of those persons are, known to the officer.

An officer does not have the power to enter or inspect any part of the premises that is used solely as a dwelling.

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3. Premises used in connection with the supply of goods

Where an officer has reason to believe that any premises are used

* in connection with the supply of goods and such goods, or documents relating to such goods, are on the premises, see VATSC Supply and consideration, or
* in connection with the acquisition of goods from other EU member states and such goods, or documents relating to such goods, are on the premises, see VATSM Single Market, or
* as or in connection with a fiscal warehouse wherein VAT only is suspended, see VWRHS 

the officer may enter the premises and inspect

* the premises
* any goods on the premises, and
* any documents on the premises that appear to relate to the supply of goods under taxable supplies, the acquisition of goods from other member states under taxable acquisitions or fiscal warehousing.

This particular inspection does not have to be for the purpose of checking the tax position of the person whose premises they are.

An officer’s entitlement to enter premises means only an entitlement to go into them. An officer is not entitled to

* force entry to the premises, or
* search the premises.

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4. Inspecting property for valuation

An officer may enter and inspect any premises including dwellings for the purpose of valuing the premises if the valuation is reasonably required for the purpose of checking any person’s income tax or corporation tax position.

An officer may enter premises and inspect

* the premises and 
* any other property on the premises 

for the purpose of valuing, measuring or determining the character of the premises or property if this is reasonably required for the purpose of checking any person’s position regarding

* capital gains tax
* corporation tax in respect of chargeable gains
* inheritance tax
* stamp duty land tax or 
* stamp duty reserve tax. 

A notice in writing must be given for a valuation inspection. See CH25380 for further guidance on inspecting property for valuation.

If a person deliberately obstructs an inspection, their obstruction may attract a financial penalty if the inspection has the approval of the tribunal, see CH25700.

There are limitations on when an inspection can take place, see CH25420.

Operational guidance starts at CH250000.

FA08/SCH36/PARA10

FA08/SCH36/PARA10A

FA08/SCH36/PARA11

FA08/SCH36/PARA12A