HM Revenue & Customs (HMRC) were given new powers of inspection of business premises in the 2008 Finance Act. They apply from 1 April 2009.

This is a freeview 'At a glance' guide to HMRC's powers to inspect business premises.

At a glance

HMRC have powers to inspect business premises.

Key points for business owners:

  • Most visits are pre-announced.
  • Ensure the details of any telephone conversation made with HMRC regarding the business, books and record-keeping etc. are recorded. The information given may form part of a notice of inspection and HMRC will expect it to be accurate.
  • Penalties apply for obstruction.
  • HMRC cannot conduct a search, only an inspection.
  • An inspection may include interrogation of computers.
  • It will include the statutory books and records, which include the accounting records and any other record that HMRC decides is a statutory record.
  • Private records will be subject to inspection if they form part of the business records for example where cash takings are banked in a personal account, or when the business records are proved unreliable and HMRC needs to verify earnings.
  • An unannounced visit must be authorised by a senior officer, although it is unclear who this might be, or the Tax Tribunal. When an unannounced visit is made, HMRC’s officer will hand a notice to whoever it thinks is in charge, verifying authorization.
  • There have been reports of individuals impersonating HMRC. If a notice does not appear to be valid, you should ask for ID and telephone the tax office on the notice to confirm the details. If no notice is given, then you should evict the impersonator and call the police.
  • HMRC will not visit domestic premises unless they are used by the business, or stock or assets are stored there.
  • HMRC also has the right to visit third parties.
  • An appeal can be lodged against an inspection notice.
  • There is no right of appeal where a notice has been agreed by the Tax Tribunal.