During the visit — what to expect

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • During the visit - what to expect
  • HMRC questions
  • Examination of accounts
  • The mark-up achieved
  • The lifestyle of the directors
  • The purchases and expenses figures
  • Whether all income has been declared
  • Whether the turnover reflects the size of the business
  • Verification of supplies and liability
  • Inspection of business premises
  • More...

During the visit - what to expect

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note outlines what HMRC will generally do during a routine VAT inspection. For information on when a visit may be arranged, see the HMRC arranging visit guidance note.

HMRC questions

HMRC generally start an inspection by asking a number of questions regarding the activities undertaken by the business. It is important that HMRC obtains a good understanding of the activities performed before they start checking the accuracy of the returns as this will help to reduce the number of queries raised by HMRC during or after the visit.

It would be prudent to ensure that the following people are made available for the visit:

  1. a member of staff who is very familiar with the activities undertaken by the business as HMRC will usually ask a number of detailed questions regarding the activities so they can check and confirm the VAT liability of the supplies made

  2. finance staff who are responsible for maintaining the accounting books / records and the staff member responsible for preparing the VAT returns

  3. depending on the size of the business, HMRC may also request a meeting with a senior member of staff in finance as this member of staff has ultimate responsibility for VAT matters within the business

Once HMRC have gone through their list of questions at the start of the visit the following activities will be performed. The activities may not necessarily be performed in this order as each VAT officer conducts their visits differently. However, this list gives

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