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HMRC internal manual

VAT Fraud

From
HM Revenue & Customs
Updated
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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.