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HMRC internal manual

Enquiry Manual

Examining Accounts: Records Examination - Planning: What to look for at the Premises

A further advantage of examining records at the business premises is the chance to actually see how the business works. If at all possible you should ask to see round the business premises. With a straightforward retail shop where you are reasonably familiar with what might go on, this is less important than with a manufacturing trade. However, you will still pick up useful information such as the following.

  • What goes in to any manufacturing process and what comes out?
  • What processes are materials subject to?
  • At what points do waste products arise?
  • How are goods prepared for sale?
  • How are goods transported off the premises?
  • Where is the stock kept - when is a physical check made?
  • What controls are there on goods arriving and leaving the premises?
  • What limitations on recording of sales are imposed by the physical conditions of the business (for example, insufficient space for sales assistants to all get to the till to ring up individual items)?
  • Is scrap stored which could be sold off?
  • Is there a trade counter for direct cash sales in a manufacturing business?
  • Are there advertisements for ancillary services?
  • Are items present which do not obviously fit into the known trade (could be additional source of income, or work for the proprietor, for example, boat under repair)?
  • Is part of the premises sub-let?