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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: commencing the compliance check: employer records not available or maintained

If an employer/contractor does not maintain proper records but voluntarily produces bank or building society pass books as evidence of payments made you may inspect them and should

  • bear in mind that payments may have also been made from other sources such as

    • other accounts
    • cash takings.

You must

  • limit any question about entries in these records to items that relate to the calculations and payment of employment income or subcontractor payments
  • not ask for the production of pass books unless there are clear indications that

    • payment of employment income or
    • payments to subcontractors

have been made through the pass books. Be tactful when requesting the production of the more sensitive records.

Where records are unavailable you should

  • take steps to maintain the impetus of the case, and
  • make early contact with the IT/CT Caseworker to appraise them of the situation.

Before leaving the employer’s/contractor’s premises

  • decide whether sight of any particular record is essential to the progress of the case.

Where the records are unavailable and must be seen

  • arrange to see the records at the earliest possible date.

Positive action to avoid delays will help you

  • continue checks with the facts fresh in your mind
  • keep arrears of working cases to a minimum.

Some records may not be held at the employer’s/contractor’s premises. A common example is where the accountant keeps records.

In these circumstances you will need to conduct the initial meeting with the employer/contractor or person responsible for maintaining the records in order to

  • identify and understand the systems put in place.

Wherever possible you should

  • arrange for the employer/contractor to produce the records at their premises.

When this is not possible and the employer/contractor insists the records are reviewed elsewhere you should

  • ask the employer/contractor to make the necessary arrangements and
  • arrange to see the records at the earliest possible date.

When a visit to an employer’s/contractor’s accountant is necessary you should

  • explain

    • that attendance is at the employer’s/contractor’s request and
    • the need to inspect books to test the employer’s/contractor’s systems.

If difficulty in obtaining records is encountered you should