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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: business records checks: at the visit: sample and number of records you need to check

Sample check of current records

To gain a representative view of a customer’s record-keeping, you should check a sample of the statutory business records for the 3 to 4 months to the date of the visit. Depending on the circumstances of the business concerned, you may choose a different period as a sample - for instance when visiting a seasonal trade at the start of the season.

Number of records you need to check

The size and nature of the sample of records to be checked for the past 4 months is likely to vary from business to business.

You need to make a clear record of the record-keeping process in your notebook. This record will form the basis of the types of checks to be made.

As a guide, you should try to check 20 receipts and 20 payments. This may not be possible in some cases, for instance where only one sales invoice is issued each month and there are few expenses. In some cases you may need to check more than 20 receipts and 20 payments to ensure that you have considered a representative sample.

Whilst you do not need to record details of every transaction checked, you must record in your notebook, the details of:

  • the period covered by the check
  • the type of check made
  • what was checked
  • your findings (including specific details of inadequacies).

The result of the check forms part of the evidence on which you must base your view as to the adequacy, or otherwise, of the records. It is important therefore that your notes clearly show that you have checked that the described record-keeping processes exist. This evidence may also be needed to support any subsequent action, on appeal or at a tribunal.

Therefore it is important that the details are meaningful to you, your manager and to a third party who may be reading your notebook some time after the visit.