How to handle a VAT visit
Sadly Steve Allen died in July 2011. His wife Leah would like to thank all those who know Steve and helped contribute to his success. She has recommends Steve's clients and anyone who is interested in this article topic to contact Rob McCann from “The Vat people” on (tel) 0161 477 6600 . Please make reference to Steve Allen.
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Steve Allen, Director of VAT Solutions (UK)
Ltd, offers some practical advice on dealing with a VAT inspection by HM Revenue
One of the most stressful events that can happen to any business is the
prospect of a VAT inspection. It’s believed that VAT Officers now have
aggressive targets to meet, so are looking for businesses that have obvious
mistakes and the cash to put them right. Some accountants say that for
every 7-10 years in business, you should expect a visit of some kind.
Here’s an easy guide to the things you should do to prepare your business
now, and how to handle a VAT inspection when it happens:
The most obvious step is to ensure your VAT affairs are totally in order. You
should employ a suitably qualified accountant or bookkeeper to help you keep
track of VAT and ensure your returns are not late. Even if you feel competent to
do this yourself, it is a good investment to pay a professional to take an
overview for you – they will ensure you stay within the law.
It’s worth every business taking out VAT investigation insurance. If you are
subsequently investigated, the policy will pay an accountant to handle the
investigation for you. Some policies also cover other tax investigations. One of
the most cost effective ways to get this insurance is to join an organisation
such as the Forum of Private Business – which, amongst other membership
benefits, provides members with tax investigation cover.
If you have made a mistake
Even innocent mistakes can be viewed badly by Officers, so you must take
professional advice immediately to work out the best course of action. There are
firms that specialise in helping businesses declare mistakes while reducing
their liability. Your accountant will be able to give advice on the best course
of action for your circumstances.
The first you may know about an impending visit is when HM Revenue & Customs
phone to book a time for the inspector to visit and look at your books. You
don’t have to accept the first date offered… if you need time to get your
records in order, then politely offer some alternative dates. You should pick a
date when all your staff will be in, and your accountant or bookkeeper is
available to attend.
Get your staff ready
Ensure your staff are aware that the business is being investigated and that
it is a routine event you are prepared for. There’s nothing more worrying than
seeing the boss stressed while a stranger roots through the paperwork. It’s also
worth telling your staff that if the inspector asks them any questions, they
should direct them to you rather than attempt to answer them.
On the day
Get in early, make sure you have your last three years’ audited accounts
available, and your bookkeeper or accountant is readily available – ideally in
person. Be polite and professional when dealing with the VAT Officer.
Give them plenty of room to work in, and keep them comfortable with tea and
coffee as appropriate. But also ensure you stay in control.
It’s vital that you or your representative keep careful notes of what is said
to you by the VAT Officer. Get copies of their interpretations of VAT law in
writing; this will help you apply their ruling consistently and deal with any
If you use professional advice or support, keep your VAT up-to-date and deal
with any enquiries promptly, you really have little to worry about. An
investigation won’t necessarily find anything wrong, and you do have rights,
including the right of appeal. The most extreme option to you is to appeal to a
VAT tribunal. A VAT specialist will be able to advise you on this.
About the Author
Steve Allen is the
Director of VAT Solutions (UK) Ltd, an established independent firm of Chartered
Tax Advisers, formed by Andrew Needham and Steve Allen. Both not only are
respected tax advisers, but have worked for both Customs & Excise and one of the
top four accountancy firms for many years. This mean that their team know both
sides of the equation and are truly experts in this field.
The company has a cross-section of clients from multi-national companies
through to medium-sized and numerous smaller regional firms of accountants and
solicitors. They produce a regular publication 'VAT Voice', which can be
downloaded directly from their website
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Article Published/Sorted/Amended on Scopulus 2008-03-19 12:52:33 in Tax Articles