SEARCH, INDEX, UPDATES, CONTENTS, SERVICES, TAX COMPLIANCE, VAT ASSURANCE VISITS
Do you know what to expect?
From the introduction of VAT in 1973, it has been administered by H.M. Customs & Excise. Most businesses have dealings with the Inland Revenue through an accountant, but H.M.C.& E. has always preferred to visit businesses.
Initially there were educational visits and control visits. These have been replaced by assurance visits.
In 1997/98 there were 193,380 visits which collected £1,597m., an average of £8,250 per visit.
Officers of Customs and Excise have retained varied, historic and wide ranging powers, but it is important to realise that the legislation allows an Officer to ask questions, but it does not permit him to demand an immediate answer. It is important not to be pressed into making an immediate answer which might be wrong or a guess.
An Officer has the power to inspect business premises at any reasonable time, but an inspection is not a search. An Officer can therefore only ask for desk drawers etc. to be opened if he is in possession of a search warrant.
The number of control visits in 1987/8 was over double the number of assurance visits in 1997/8. It appears the few assurance visits occur by chance, but are more likely to occur from targeting of specific trades or businesses.
Before a visit Officers may have, for example -
If irregularities are discovered an assessment may be raised. The Officer is required to use his judgment to quantify the assessment.
The best way to counter an assessment is to have detailed and accurate records. You must issue a formal appeal within 30 days of receiving a document which you dispute. The procedure is defined in the Value Added Tax Tribunals Rules 1986, and specialist advice should be sought in almost all cases.
One simple point - do you keep records of your selling prices each time they change? It is vital information if you have to justify your gross profit margin. Your purchase invoices record your buying price, but without a record of the selling price, that is not enough information.
If you ask us to review your systems and records, we could identify procedures you might decide to change.
See also Search Warrant.
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 22 May 2003.