Each year thousands of UK businesses receive a visit from HMRC. The vast majority are made through official appointments. However, increasing numbers of businesses are finding HMRC are making unannounced visits. If this happens to you, it is very important to know your rights.
There are generally two types of unannounced visit and you should clearly establish at the outset what is happening. The first type of visit is where a routine PAYE or VAT inspection is being carried out but there has simply been a failure, somewhere along the line, to notify you in advance. A letter may have gone astray, for example, or you may be told, “We tried to call you but there was no response.” In such circumstances, you may simply ask HMRC to come back another time when you will have the records ready, which will also give you enough time to inform us of the visit.
The second type of visit is where HMRC deliberately do not forewarn the business but simply turn up. In this case, they will have a formal notice signed either by a Tribunal or an Authorised Officer of HMRC. It will state on the notice that it is an Unannounced or Short Notice (less than seven days’ notice) of inspection carried out under Sch 36 FA 2008. This is actually a request to enter the premises; please note it does not give HMRC automatic rights of entry. There is no penalty for refusing entry for a notice signed by the Authorised Officer. There could be an initial penalty of £300, if the notice has been signed by a Tribunal.
These visits are not random. If these visits take place during Larking Gowen’s business hours, please call us immediately to let us know and before you give HMRC access to your premises. Make it clear you do not wish them to inspect anything before you have spoken with us.
Be aware that the visiting Officers will initially ask to speak with the business owner. If they can’t be traced, the Officers can ask to speak with anyone who is in charge at the time. If no one is actually in charge at the time they may simply enter the premises and leave the notice displayed in a prominent place. They need only be told “no” once and they should not enter.
Know your rights
HMRC do not have any absolute right to meet the business owner; both announced and unannounced visits are inspections, not searches. They have the right to ask for any business record, which is reasonably required to check your tax affairs, but they cannot ask you to open safes or drawers to see what’s there. If there is any uncertainty over whether an item is reasonably required, HMRC should be challenged instantly rather than afterwards. Also, the extent of the inspection should have been made clear prior to the visit and this should not be extended without justification.
You should be able to call HMRC offices to check the identity of those visiting you.
They do not have the right to ask you to cash up your till (if you have one) unless it’s at the time of day/night you would normally do so.
If the visit is unannounced and outside of our business hours we would ask you to contact us at the next opportunity but bear in mind our above comments. If you are members of our Tax Fee Protection Service, our insurers have made available a legal helpline 24/7, 365 days a year, which you can call in the event you receive a visit out of hours.
If you are not currently protected against the professional costs incurred when you have a tax investigation or enquiry, contact us to find out more about Larking Gowen’s Tax Fee Protection Service on 01603 624181 or email us at firstname.lastname@example.org