HMRC Task Forces have been visiting business premises and inspecting traders' records and, in many cases, visits have been unannounced. In recent months, restaurants have been hard hit around closing time, on some occasions when the proprietor was away.
The tax officers are obliged to give the occupier of the premises a written notice. However, if the occupier is not around, the notice can be given to any person who appears to the officers to be the person in charge, or it can simply be left in a prominent place.
All notices must be sanctioned by an Authorised Officer of HMRC, or the First Tier Tribunal, and they should show the date and time the visit is to be undertaken.
A copy of leaflet 'FS4 Compliance Checks - Visits - unannounced' should be given to the occupier, or left for his information.
Inspections must be 'reasonably required and carried out at a reasonable time', but traders and HMRC will have different views on what is, or is not, reasonable. Clearly, HMRC considers that visits to restaurants at closing time are fair game.
HMRC's powers in this area are somewhat restricted. Inspections should not relate to any period in respect of which tax return has already been made, unless the return is already the subject of an open enquiry.
If there is not open claim or enquiry and that HMRC does not have reason to suspect that tax has been underpaid, the inspection should be limited to VAT and PAYE, or to a period in respect of which a return has yet to be filed. That said, an enquiry can be opened but the issuing of a notice of enquiry at the beginning of the inspection visit.
Traders can appeal against a notice, unless it has been sanctioned by a tribunal, or it relates to statutory records.
Traders in these industry sectors should prepare themselves and their staff for a visit. They should be keeping proper records, but they should be aware also of their rights and the behaviour standards they should expect from tax officers.
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