CH254010 - 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.