A VAT quickie.
We understand that HMRC are about to introduce new plans to change the way some VAT inspections are carried out.
The intention is that when a business is selected to an inspection, rather than arranging and visiting the business in the traditional way, initial contact will be made with the responsible person. At this point a short telephone questionnaire will take place. If this option is taken then it is possible that HMRC will reconsider the need for a full inspection. This appears to be along the lines of some pre-credibility processes. It is a pilot exercise and will be entirely voluntary for the taxpayer.
If this approach enables HMRC to focus on evasion and high risk business while reducing the burden for the majority of businesses who always try to be accurate with VAT declarations it is to be welcomed. We shall see how the pilot goes and whether this is rolled out to more businesses. HMRC expects that this will be a benefit for both them and taxpayers and it is to be hoped that this is the case.
We have no knowledge currently how “brief” the questionnaire will be and how much information and preparation will be required. However, it is likely that they will focus on industry specific questions rather than on processes and controls.
If contacted by HMRC our usual advice is to contact us to ensure everything is as it should be. This may avoid penalties and ensure any enquires are concluded smoothly.