Commentary

V7.308 VAT inspections

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.308 VAT inspections

Part V7 Tax planning | Commentary

V7.308 VAT inspections

Background

As explained at the beginning of this section, routine VAT visits for many businesses are now very unusual. The focus of HMRC is to adopt a risk-based approach to deciding which businesses should be targeted. The following businesses tend to be considered higher risk and could receive more regular visits:

  1.  

    •     cash traders – where there is a risk that sales (and therefore output tax) could be understated

  2.  

    •     traders dealing in 'relevant goods and services' – eg mobile phones and computer chips that have been the subject of widespread VAT fraud

  3.  

    •     land and property traders – either businesses dealing in property or providing building services that have complex liability issues

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