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HMRC internal manual

VAT Fraud

What to consider prior to determining whether to use an intervention: testing credibility: introduction

Once you have fully documented the way the taxable person runs his business (VATF32100, VATF32200 and VATF32300) and determined that there has been a supply for VAT purposes (VATF34000) you need to test the credibility of what you have been told and what you see. This can be done in a variety of ways, from conducting a straightforward ‘tick and turn’ or ascertaining whether the transaction was contrived (VATF33200 and VATF60000) by carrying out a credibility exercise, such as a mark-up (VATF33300) or cash reconciliation (VATF33400).

V1-37 Control Notes provides guidance on some of the techniques that can be used to check credibility.