HMRC - Inspection
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HMRC should give you 7 days’ notice before they inspect your records. If not, they should contact you before the visit to agree a time and date.
HMRC can, under certain circumstances, make an unannounced visit.
HMRC should get tribunal approval before carrying out an unannounced visit. If you try and stop an unannounced inspection from entering your business, you may be hit with a penalty if the visit was authorised by a tribunal.
You may be inspected more often or less, depending on how complex your business is.
The law says an inspection can only take place if it is reasonably required to check your tax.
You may have to pay a penalty if there are problems with your records, although these should be reduced if you work with HMRC to correct any problems.
HMRC cannot search the premises – they are only allowed to carry out an inspection. This means that the inspector can only look at the premises, and the inspection should be limited to only what they have asked to see.
HMRC is given powers by Schedule 36, legislation that says exactly what an inspector can do. HMRC will most often present this when making an unannounced visit. In theory, you can refuse inspectors entry under Sch. 36 if it wasn’t approved by a tribunal – but be warned, if HMRC deems you to be obstructing a tribunal-approved inspection, you will be issued a penalty of around £300.
If your business is run from your home address, HMRC can come to your home.
HMRC is allowed to require you to give information if they need it to check your tax position. They can only request information that you can reasonably give.
If you have been visited by HMRC, you should always ask for confirmation that they are who they say they are. Always read any documentation offered and check who sent the inspectors.
- You should always try and resolve any problems with HMRC by talking with the person who has been dealing with you first.
- If this is impossible or has not resolved your issue, you should use Resolver to contact them.
- HMRC operates a tiered complaints system. Complaints will go through two tiers of service.
- If you are still unhappy, you can ask your MP to escalate your complaint to the Parliamentary and Health Ombudsman.
If you believe HMRC has not correctly followed procedure, it's always worthwhile to consider contacting them via Resolver. HMRC may offer compensation for any distress, delay, damage caused, or costs incurred by HMRC (such as the cost of having to hire an accountant).
It's worth knowing that HMRC have the right to take enforcement action to reclaim any debts (under certain conditions).
You should be aware, however, that HMRC field agents have no right of seizure. They might take note of the things you have (your assets), but they can't take any on the spot.
HMRC can level penalties for late payment. It's always worth contacting HMRC if you believe you might have been incorrectly penalised (or if serious circumstances stopped you from paying on time). HMRC will often consider any reasons you might have for late payment.
You should try and correct any mistakes with your tax as soon as possible.
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