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bigduckontax, Accountant
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I have a limited company trading for 5 years and I got a call

Customer Question

I have a limited company trading for 5 years and I got a call from HMRC asking to visit for a 'VAT Inspection'

My VAT is in order so I am not worried about issues there, however, it is going to cost me a day off work from a new contract I recently took up with a client. Not only will I lose a days work but also it can effect this new contract due to the demands and I do not really want to tell the client I have a VAT inspection on that day.

Is there any compensation for the lost work? Or is there any other work around I can make with HMRC such as printing/copying off all documents, invoices, receipts and sending to their office to inspect? I asked if it could be done at my accountants office, however, they insisted I would have to be their anyway. My home is where the inspection is planning to occur even though its only used minimally as an office as I am always at client sites.

Thanks
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.

VAT Inspections are very rare these days, of course they used to be done at regular intervals. I have survived two, but at least 20 years ago. On one the Inspector stayed for 10 minutes then said 'I'm wasting my time here. I'll mark your up not to be inspected for 5 years.' and departed with a gleam in his eye for Mr Patel's corner shop down the road! Shortly after that regular inspections were discontinued. The second I had to arrange to be done over 400 miles away and at that one the Inspector demanded to see an the documentation for an input tax claim for 13p, yes 13 pence!

However we digress from your problem. I have always found the VAT service most accommodating and helpful. Could you not contact them to arrange a mutually acceptable date and time? I recall one being done on a Saturday morning, most useful. That would probably solve the difficulties with your client.

I regret you will not be compensated for the inconvenience or loss of time. You are on a hiding to nothing there, regrettably. VAT inspections are part and parcel of registration and operating the tax.

I so hope I have pointed you in the right direction.
Customer: replied 2 years ago.

Very interesting!


 


I will try contact them again. Although I am sure I have paid the right VAT, and although I am flate rate registered (so no claims on expenses) I am finding it hard to find some of the receipts for example for the odd taxi ride. Although this will not effect the VAT calculation are their consequences of not having all receipts? (I know this is a secondary question but grateful if you could advise)

Expert:  bigduckontax replied 2 years ago.

You only really have to have vouchers to support a claim for Input Tax. If you are not claiming back VAT it's not really the concern of a VAT Inspector. Having been brought up in a belt and braces environment I have sheaves of paper. I even have income tax files doing back to 1991 when I first started work!

 

If you keep comprehensive records and adequate books of account you should have no problems.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3116
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Customer: replied 2 years ago.

I guess this could be a blessing in disguise (optimistc) in that I have just bought piles of empty folders ready to start filling with every bit of paper work, receipts, statements for both of my limited companies.


 


On a separate note the notification letter of this inspection (after the phone call) only just arrived a couple days ago and I will call them next week to try have the inspection done near my client site offices to avoid losing a days work!

Expert:  bigduckontax replied 2 years ago.
Good thinking! As they say in the theatre world, 'Break a leg!'

The inspector will like it if it all looks orderly.

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