VAT Inspection

GILL Registered Posts: 31 Regular contributor ⭐
We have a VAT inspection in two weeks and having never dealt with one before I am panicking slightly. Not helped by the fact that our Finance Director, who dealt with the initial VAT registration and set the policies left in December.

Not really sure what to expect.


  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘

    Firstly do not panic and make sure that you get hold of Notice 989

    'Visits by Customs and excise officers' and read it.

    Your notification should advise you of the period to be covered and I only ever have records available for inspection for that specific period

    The only inspections that I have been involved with have been for SME businesses that are able to run off paper reports each quarter, they do not let HMR&C review their database at a visit as this could opon up a can of worms as we all know that entries are posted that do not always relate to actual paperwork:laugh:

    I review all of the copy returns submitted for each period under review and make sure that a) they are there and b) any supporting computations are attached.

    The next thing that I do is to make sure that the turnover reported on financial statements reconciles to the turnoved declared on the returns and note any discrepancies.

    I also review the transaction lists and ensure that valid purchase invoices are held for large items (large depending on the business)

    If there are zero rated supplies that require certification e.g charity advertising, I make sure that these are all in place as well.

    The letter and notice list the items that you need to make avilable, just double check to make sure that you have them all and I would do this sooner rather than later as you may have to obtain copies.

    Get any up to date notices that relate to the sector that your business operates in, for example you may be in antiques operating a marginal scheme. Read through the notices and ensue that you are processing things correctly and that you are 100% up to date on the subject area.

    I make sure that an area is allocated beforehand and that the books, records etc are all set out in that one area where the inspector will work, on the day before.

    The inspection normally runs with a question session first qustions about the business, owners, what you do, customer, suppliers what VAT scheme you run, sotware, etc, etc. Offer coffee and then leave the inspector alone to do there work, make yourself available and make sure that the inspector knows where you are. You do not want them wandering around speaking with other members of staff, tell your staff that if they do come out then they must redirect them to you.

    At the end they will have a list of questions for you and depending on the outcome tell you (hopefully) that all is ok and they have nothing to report or they will tell you where problems exist and will follow up in writing.

    Oh and one final golden rule, only answer the questions asked?

    Best of luck

  • GILL
    GILL Registered Posts: 31 Regular contributor ⭐
    Thanks for that. Pretty much along the lines I was going to follow.

    Unfortunately we are a Charity that also sells equipment to disabled people which is a VAT minefield.

    Just have to hope that we have interpruted everything right. If not at least I should soon be able to get a straight forward answer rather than the conflicting advice I have had up to date!
  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
    That's the spirit,

    If you have got it wrong then you have got it wrong. Too late now anyway as you would not be covered should you make a disclosure as a viisit is imminent.

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