DPP Business Tax

What Are HMRC’s VAT Investigation Time Limits

If you’re a business owner, you’ll know that a happy taxman equals a happy business. However, a VAT HMRC inspection can happen to any type of business at anytime. So what triggers one, and what are HMRC’s VAT investigation time limits??

VAT inspections might be the cause of some suspicion – or none at all. So don’t immediately presume that an invitation from HMRC to visit your business premises is automatically an accusation of wrongdoing.

What Triggers A VAT Inspection?

Some of the reasons a VAT inspection might occur include the following:

  • If you fall into a business category that HMRC sees as a risk industry
  • You do not return your VAT returns on time
  • Some information has been sent to HMRC concerning your business
  • If you have a history of default surcharge penalties, late payments or non-payments of VAT in your business
  • Your business is displaying abnormal patterns of trading

A VAT inspection from HMRC will always be preceded by a letter or a call to let you know the date and time of their visit.

How To Prepare For A VAT Inspection

Before their visit, you should prepare your office. This means gathering your records which respond to the VAT periods in question. These will usually include purchase and sales books, copy sales invoices, purchase invoices, bank statements, cheque books and payslips. You can always check with HMRC if you are required to present them with anything else.

Alongside their inspection, they will ask you, the company owner, some questions regarding your business. This is why you’re always recommended to have a VAT consultant with you. They will be able to help you not only prepare thoroughly, but also answer sufficiently.

What Happens After A VAT Inspection?

If, at the end of the inspection, the officer has found any errors, you will be ordered to improve the VAT record keeping. If they have uncovered evidence of unpaid or underpaid VAT, the HMRC officer will issue an assessment with a penalty.

If you’re aware that the VAT keeping within your company has gone beyond your control, you might experience a few problems in your assessment. If you know your VAT inspection will uncover the full extent, it is a good idea to contact a tax lawyer.

What Are HMRC’s VAT Investigation Time Limits?

An enquiry will usually take place within 12 months from the deadline of your annual review, though this may differ under special circumstances.

What To Do If You Need VAT Investigation Support

DBT & Partners has highly-trained lawyers across the country who can help you if you’re subject to an HMRC investigation. If you need help, support and guidance, contact the team at DBT & Partners.

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