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How to Deal with HMRC VAT Inspection

  • Posted 12th March 2015

How to Deal with HMRC VAT Inspection

If you have bagged a VAT inspection from HM Revenue and Customs (HMRC), do not panic and just be prepared. VAT inspections by HMRC are usually a routine matter. These inspections are normally conducted by officers individually. They can visit your business to inspect your VAT records. However, they will inform you for a visit by giving a notice period of 7 days. In the meanwhile, HMRC will inform you about the information they want to look, how long it’s likely to take and if they want to inspect your properties. The sole purpose of this visit is to ensure that you are paying or reclaiming the right amount of Value Added Tax. The visit depends mainly on two reasons; how big or complex your business is or if you have submitted late or incorrect VAT Returns in the past.

How to prepare for visit:

• Make sure both the person who completes the VAT returns and the person who signs the VAT returns are available for all the selected days • Make sure your accountant or financial advisor is present during the days of inspection • Review your VAT declarations thoroughly and if you need to disclose any other declarations to HMRC, do it before the inspection starts • Collect all your VAT Returns and working papers for the last four years or the period since you were registered for VAT • Keep a full and updated VAT correspondence files and the last two or three years annual accounts • Keep bank statements, purchase and sales invoices

During the visit

• Be polite and friendly • Allow access to the files that form part of your “VAT Records” (as described in our FREE leaflet “Your VAT Records”) • Allow the VAT inspector if he asks to “inspect” your business premises (as described in our FREE leaflet “Your Business Premises”) but let someone accompany him when inspecting your premises • Answer all the questions very clearly

After the visit

• Obtain a brief summary of the inspection from HMRC • Ask the inspector to put all of HMRC‟s concerns about your business like any corrections to made in your VAT account, any penalties to pay, ways to improve your VAT record keeping in writing • Ask about all the time limits for providing additional information to HMRC If you need to appeal HMRC decision, you must do it within 30 days. Hope, this blog will help you on VAT inspections. If you need any assistance on such inspections, you can contact our VAT consultant at 020 7060 9556. You can also reach us at info@phoenixtaxaccountancy.co.uk.

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