Est. 2007
© 2009 Intellectual Property of Mike Perry - All rights Reserved :
HMRC now has enhanced access rights - this means it can inspect business premises and a taxpayer’s record keeping at any
time. They can give a minimum of 24 hours’ notice to the taxpayer – or they can just turn up unannounced, demanding to inspect
books and records, provided they have the prior permission of a senior HMRC officer. Declining access to these so-called
‘real time’ visits will result in a penalty – and although HMRC doesn’t have the right to arrive and go through your drawers, the
timescales mean that it is harder to have an adviser present or to seek advice to ensure HMRC inspectors only see what they are
allowed to.
The purpose of these ‘real time’ visits is to monitor the general quality of accounting records kept in support of a future return. If
records do not comply with minimum standards, HMRC can issue an arbitrary assessment to tax on the basis that underpayment
is likely because of poor quality accounting records.
Advice to keep in mind:
In virtually every case you will receive at least 24 hours’ notice of an inspection. However, if you are faced with an unannounced
visit from the tax man and you’re not able to organize an advisor to quickly appear, be courteous and answer their requests. Ask
to see authorization from a senior officer and maintain control of the situation. Offer them a meeting room, and fetch any
information they ask for rather than allowing them to snoop through the accounts file on the office floor. It’s also fair to say a
business won’t face unannounced visits unless there’s cause for suspicion, e.g. because details from third parties don’t tie in
with what has been reported on the tax return.
If you do receive notice of a visit from HMRC or notice of an enquiry and need an adviser, make sure you enlist the help of
someone who has enquiry experience and comes recommended. If your accountant doesn’t have the right level of expertise,
they probably know of someone who does.
Finally, never ignore an enquiry notice: always make sure you deal with any correspondence quickly to avoid making the
situation worse. Remember that with HMRC you are treated with suspicion of being guilty until you can prove you are innocent –
it is a subtle difference to the usual approach to justice but nevertheless has big implications for those in the hot seat.
KISSE has good accounting and record practices at the heart of its procedures: with this in mind you can rest assured that all your business records will be kept up-to-date and
will meet HMRC minimum standards as long as system instructions are adhered to, ensuring that all paper records will have corresponding electronic entries on the KISSE
system, offering system integrity for all records, affording the peace of mind of knowing if you get that unannounced knock on the door you are covered.
