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HMRC internal manual

VAT Small and Medium Enterprises Assurance Manual

The trader report: Introduction

A critical examination may identify areas worthy of closer scrutiny on the visit for example

  • inconsistency between input and output tax;
  • significant fluctuations between periods or inconsistencies with the previous year’s trading; and
  • repayment returns made by a payment trader.

Periods, which break the pattern, should be given particular attention on the visit. The information on the report is taken from the trader’s returns and assessments. The report can therefore be used to verify the accuracy of the trader’s posting of figures from the VAT account. It can also provide indicators to areas of error in the trader’s system. Some indicators are based on the trader having ticked a box on the return. Do not assume that they are correct until you can establish the right to an indicator from examination of trader’s records.