What to consider prior to determining whether to use an intervention: testing credibility: conducting a cash reconciliation exercise
If the taxable person is a cash trader then his spending should always equal the money he has received. By calculating the spending, the declared takings can be verified at visits:
Gross takings + other income paid into the business = money spent.
Before attempting a cash reconciliation it is very important to question the taxable person in detail. From the interview and taxable person’s records, you can construct a schedule of monies in and monies out.
For further guidance on mark-ups please see V1-37 Control Notes.