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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: business records checks: visiting officer’s visit outcome: case scoring definitions

Your judgement as to the adequacy or inadequacy of the statutory business records will take one of five possible degrees of risk, as set out below. This will be based on the information provided and the statutory records checked.

Degree of Records Risk and Action to be taken
   
Adequate records The statutory records appear adequate and no further action is required.
     
  Adequate records - RIS referral The statutory records appear adequate, but there has been a technical failure - for example failure to register for VAT, PAYE or CIS.

In these circumstances a RIS referral is required.

     
  Inadequate records (follow-up visit required) The statutory records are inadequate and a follow-up visit is considered appropriate.

This will usually be 3 months from the first visit but may be longer depending upon the nature of trade.

     
  Inadequate records (RIS referral) The statutory records are inadequate indicating a significant underassessment of tax for earlier years.

A RIS referral for tax intervention is required.

     
  Concluded, Sch 36 powers exhausted This may occur when you have had no cooperation or very little cooperation from the customer or where the statutory records cannot be made available.

This means you have been unable to make a judgement about the records, even after using formal information and inspection powers.

In these cases, there is a high risk of non-compliance and you should consider a referral to RIS for a tax check.

 

Flowchart (Word 43KB) - initial visit outcome process for ‘Adequate’ statutory records.

Flowchart (Word 62KB) - visit outcome process for ‘Inadequate’ statutory records.