When visiting a premises to carry out an inspection to check on tax affairs HMRC provides a factsheet which gives important information about the visit and the taxpayer’s rights. It is this guidance which has been updated.
The factsheet covers a number of areas including:
- About unannounced visits or inspections: which explains what happens when an inspector arrives and the fact that before authorising the inspection, HMRC will have considered whether they could have got the information needed in another way.
- Do you have to allow this inspection to take place: if you don’t let HMRC carry out the inspection, they can ask an independent tribunal to approve the inspection. If it is approved and you still refuse to let HMRC carry it out, they will charge you a £300 penalty. You might also have to pay further penalties of up to £60 a day until you let HMRC carry out the inspection. If the visit is at an inconvenient time, in some circumstances they may agree to visit you at another time.
- Reasonable excuse for not allowing the inspection to take place: this is the section which has been significantly updated. It explains the criteria for a “reasonable excuse”. Examples include something that stopped the company from meeting a tax obligation on time which they had taken reasonable care to meet, but was perhaps caused by circumstances outside their control or a combination of events.
- If you run your business from home: normally HMRC will only visit you at home if you run your business from there.
It’s worth noting that in relation to the ‘reasonable excuse’ section there is a serious caveat which qualifies it with ‘whether you have a reasonable excuse depends upon the particular circumstances in which the failure occurred and your particular circumstances and abilities. This may mean that what is a reasonable excuse for one person may not be a reasonable excuse for someone else.’
It’s well worth keeping your business tax affairs in order so as to avoid the possibility of being on the receiving an unannounced visit from the taxman. If you have any concerns about a dispute with HMRC that you think may escalate talk to our experienced team who can assist.
You can read more about how we can help with HMRC disputes here.
