HMRC inspection powers

The following Tax practice note provides comprehensive and up to date legal information covering:

  • HMRC inspection powers
  • What are the purposes for which HMRC may use its inspection powers?
  • What can HMRC inspect?
  • Particular types of inspection
  • What can HMRC not inspect?
  • Meaning of inspection
  • Notice of inspections
  • Tribunal approval of inspections
  • Appeals
  • Penalties

HMRC inspection powers

This Practice Note is about HMRC's powers to inspect business premises in order to check a person's tax position, and the restrictions on those powers. HMRC’s powers to obtain information and documents are covered in Practice Note: HMRC information powers.

Revenue Scotland and the Welsh Revenue Authority have equivalent inspection powers in relation to the devolved taxes.

Wider-reaching powers are available to HMRC where fraud is suspected. For more details, see Practice Note: HMRC criminal investigations and dawn raids.

HMRC may also exercise inspection powers in its anti-money laundering capacity. For more details, see Checklist: HMRC guidance under the Money Laundering Regulations 2017.

What are the purposes for which HMRC may use its inspection powers?

HMRC may use its inspection powers only if this is reasonably required for checking a person's tax position. Tax position is widely defined and includes:

  1. past, present and future tax liabilities

  2. penalties, and

  3. tax claims, elections, applications and notices

According to HMRC guidance, 'reasonably required' means getting the balance right between:

  1. the burden put on someone to face an inspection, and

  2. how important the inspection is in deciding on the correct tax position

The powers apply to all the major taxes, including income tax, corporation tax, capital gains tax, PAYE, NICs, VAT, inheritance tax and stamp duty land tax (but not excise duties, for which there are separate information and inspection powers).

The powers extend

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