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The Danger of VAT Inspections!

As Accountants in Goole, we do act for a lot of VAT Registered Businesses. And for these VAT Registered Businesses it has always been expected that at some point the VAT Office would send down a VAT Inspector to visit the Business and inspect the Business records, just to make sure that everything was ok with the submitted VAT Returns.

Of course, lots of Business people view the Vatman’s visit as about as welcome as a Leeds United supporter found in the Stretford End at Old Trafford, and so view the VAT Inspector’s visit as the 1972 Elvis Presley hit would say with ‘Suspicious Minds’. However, with most VAT Inspectors what you tend to find is what they actually do carry out, is precisely as Ronseal would say “exactly what it says on the tin” – a VAT Inspection of the books and records of the Business. And it is true to say that this will be for the vast majority of VAT Inspectors.

However, we have recently seen a different breed of VAT Inspector, one who is attempting to track down and look for any other Business activities, whether real or perceived, that are being carried out by the VAT registered Business and which may not have been entered in the Business Books and records.

Now let me make this perfectly clear – YES, the Books and records should reflect all the Business activities and all appropriate transactions should be fully recorded and the correct amount of VAT paid over to HMRC. But in the interests of honesty and transparency, I also believe that if HMRC wish to conduct VAT Inspections using any investigative methods normally conducted by a Tax Inspector in a Tax Enquiry or Tax Investigation, then this should be revealed to the Business owner preferably in advance of the VAT Inspection. Or alternatively, certainly before the VAT Inspection actually gets under way, so that the Business owner is fully informed as to the motives behind the VAT Inspector’s visit. I am personally experienced enough to know a VAT Inspection is conducted in a totally different manner to a Tax Investigation, and I believe the Business owner is entitled to be aware of these differences, and be notified of what the VAT Inspector’s actual agenda will be. Put simply, if the Business owner is to be the subject of a ‘Jeremy Paxman style grilling’, I think it is only fair that he is notified in advance. The Business owner then has the opportunity to seek professional advice and assistance if necessary in dealing with this type of ‘VAT Inspection’. Certainly our Clients at JCL (Jones Cooper Limited) who have taken out Professional Fee Protection with ourselves are entitled to have us present anyway, whether this is merely to handle a routine VAT inspection or to assist them with the ‘other type’ of Vat inspection.

In view of this potential new breed of VAT Inspectors I strongly recommend in the future that if any of our Clients are notified of a forthcoming VAT Inspection, then they contact us immediately – We can help!


Rickey Cooper FFA, FMAAT, ATT

JCL – Jones Cooper Limited

One Response to “The Danger of VAT Inspections!”

  1. Anthony Maloney says:

    Just glad I took out he insurance for peace of mind should it be required

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