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HMRC internal manual

Compliance Handbook

How to do a compliance check: using inspection powers: unannounced inspections: when they may be needed

The power to carry out inspections without advance notice is vital to enable HMRC to tackle the hidden economy and other serious non-compliance.

However, in order to ensure that our actions are reasonable and proportionate in relation to the risk, an unannounced visit must only be made where

  • there is a clear operational need to avoid giving advance notice of an intended visit, and
  • the intrusion and potential inconvenience is justified to achieve HMRC’s aims, see CH21360.

If the tax position can be established in a less intrusive manner an unannounced visit is not appropriate. Further guidance on the Human Rights Act can be found at CH21300.

An unannounced visit could be necessary where

  • persons have repeatedly missed appointments
  • deliberate understatement will only be evidenced if the visit is unannounced, for example

    • failure to register for VAT
    • failing to operate PAYE
    • suppressing cash takings
    • trading in a second, off-book activity
    • MTIC and Labour Provider fraud
  • there is a risk that the business may have been established to obtain tax repayments fraudulently.

An unannounced inspection must be authorised, see at CH254020.