THE CANS
• They can turn up unannounced.
It is very unlikely they will do this. You would probably have had
previous knowledge they are looking into your affairs either
because they have written to your accountant or you. They will
normally give seven days notice of a visit. It is possible for them
not to give notice but this would be very rare and only where they
think notice could give time for business documents to be
changed.
• They can only look. They cannot search.
They can only look at the documents and records you keep for tax
purposes. These will include what you would normally give your
accountant to prepare your accounts and Tax Return. It does
extend to other things though such as personnel records, vehicles
and log books, finance agreements, diaries, stock, premises and
assets.
Business documents are not UprivateU bank statements or diaries
(unless you use these for business purposes).
They can only look at what you give them or is visible. They
cannot open drawers, filing cabinets or work on a computer for
instance. They cannot search for anything or wander around
without your permission. If you have had a VAT or PAYE visit,
an enquiry visit will be very similar to this.
• They have the power to look at what is “reasonably required” to
check your tax affairs. This is not defined anywhere so is open to
interpretation but must be ruled by common sense. Probably quite
a good guide would be what records would you ask to see if your
were thinking about taking a business over?
THE CANNOTS
• They cannot force entry. They cannot insist on coming in.
Both of these are even if they say their visit has been authorised
by the “First-tier Tribunal”.
You have the right to refuse entry. If you allow them in, they
must act with care and consideration. • They cannot insist on dealing with you.
You do not have to meet them. You can delegate this to anyone
you like to include any member of staff or professional adviser. If
you do meet them you can terminate the meeting and ask them to
leave at any time.
• They cannot insist on meeting at your business.
The inspection does not have to take place at your business
premises but could instead be at your accountant’s office.
• They cannot search.
They must get clearance from you before they look at anything
and can only look at what you give them.
• They cannot come to your home.
If you do not use your home for any business purpose, they cannot
visit you there. Sometimes your home is also your work place,
e.g., pubs, shops, surgeries, farms and guest houses, so they can
seek to visit these. Your home would also be classed as business
premises if you hold records, stock or assets there or is where the
business is registered for VAT. It is not a place of business if you
take work home temporary.
• They cannot look at private records.
They can only look at business records so they cannot look at
private items. Business records are classed as “Statutory records”.
These are defined as “The documents and information which a
person is required to keep and preserve to fulfil their obligations
under the Taxes Acts and VAT legislation.” (para 62 of
CH203000.) These will include all past records falling into this
definition and future ones, e.g., planning applications or business
plans. They will normally be enquiring into accounts of a year or
two ago. Under these new rules, they can ask to see current
records if they shed light on the period they are looking at.
Records are all paper and electronic records so will include
electronic ones. This will cover computers, servers, discs,
memory sticks etc. Normally printouts of records will be
sufficient. You can supply them in electronic form if you prefer.