Visits by VAT inspectors
I was recently sent a copy of a publication that purports to contain useful advice on tax. Included in the publication was a page on the powers of a VAT inspector. Sadly the advice given is woefully inaccurate.
Some of the information in the article is fine. I am concerned though that anyone following the advice that a VAT inspector has no right of entry to premises to inspect records, so can be legitimately refused entry may find themselves on the wrong end of a charge of obstructing an officer of Revenue & Customs. An officer of Revenue & Customs has the power to demand the production of documents at the principal place of business and at “such time as the authorised person may reasonably require.” Now you could argue that this power doesn’t allow an inspector to demand entry.
Let’s deal with that issue. In Paragraph 10 of Schedule 11 of the VAT Act 1994 the officer of Revenue & Customs has “… for the purposes of exercising any powers under this Act … may at any reasonable time enter premises used in connection with the carrying on of a business.”
It’s quite clear that an officer of Revenue & Customs has the power to enter any business premises and inspect records at any reasonable time and not at any other. What’s a reasonable time? During business hours would probably be the best answer. There could be times when, depending on the business, that certain times of the day would not be reasonable even when the premises are open for business. Lunch time in a restaurant springs to mind. Any reasonable officer would probably be prepared to wait until the activity died down before carrying out their work.
One other point that the article I referred to at the start says is that unannounced visits are not within the authority of H M Revenue & Customs. Give the powers quoted above its quite clear that this advice is also probably incorrect. An officer of Revenue & Customs doesn’t have to make an appointment, but if they turn up at 10pm that’s not a reasonable time for most businesses or business people. If they turn up at 10am and you have little choice but to let them in or risk the obstruction charge.
What if they do turn up unannounced and they are overbearing and intimidating? Phone your VAT adviser for guidance, or ask to phone their boss. Yes they do have powers, but you have the right to question their use of those powers.
Before I close I do have to say that the article does contain some good advice – just not enough of it in my opinion – and that is that you don’t have to answer questions put to you immediately. You can make it clear that you will provide an answer, but only after taking the time to check your facts.
Now, should I write to the publisher and tell them what I think?
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