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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: commencing the compliance check: talk through, walk through and testing the systems

It is important to remember that for each system identified COG905075 there may be sub systems in operation for example:

  • the prescribed system - set down by the employer/contractor or government
  • the alleged system - what the employer/contractor says is in operation
  • the actual system - what is operating in practice.

You will therefore need to conduct:

  • ‘the talkthrough’ - COG905085 

    • asking effective questions to establish what systems are in place to make sure that the employer/contractor can meet his statutory obligations
  • ‘the walkthrough’ and testing of the systems - COG905090 

    • examination of an appropriate amount of records to confirm that the systems and controls operate in the manner described by the employer/contractor and whether they succeed in enabling him to meet his statutory obligations, including tracing transactions through the relevant systems as evidence.

Particular attention must be applied to examination of any system with a risk identified either by RIS, pre-visit preparation or the ‘talkthrough’.

The ‘walkthrough’ may also identify further risks.