What to consider prior to determining whether to use an intervention: making and issuing a Notice of Direction: introduction: general
This section of the VAT Fraud guidance manual provides advice on when and how to consider the application of the power to require businesses to keep additional records, where such records might assist in identifying supplies on which VAT might go unpaid. It also provides guidance on how to apply the related penalty provisions.
This measure was introduced to allow HMRC to direct individual businesses to require them to keep specified records relating to goods that they have traded. It can not be applied to the provision of services. It is also separate to an information notice for statutory records (see CH23000 of the Compliance Handbook).
The measure is primarily (but not exclusively) intended to be used in cases involving suspected Missing Trader Intra-Community (MTIC) fraud (see VATF23500). Any officer considering using the power in other circumstances (i.e. other than for the purpose of countering MTIC fraud) must consult the VAT Fraud Team.
The law under which a direction can be issued is set out in VATF35120. There are penalties for non compliance and this is dealt with in VATF35500.
This guidance should be read in conjunction with the relevant sections of the Compliance Handbook, which sets out both departmental policy and the existing legal framework from which HMRC’s officers’ powers are conferred.