Hi all, we recently had a VAT inspection covering the past 3 years.
The inspector was with us for a couple of hours and upon leaving (around lunchtime - not because we were closing) asked us to scan every invoice from the past 3 years (well over 1000) and email them to her to check at her convenience.
Is this a fair request? It's a lot of work to scan all those invoices when they are readily available for her here.
In my opinion, if she wants this information, she should either stay at your premises for the duration or take your records away (with your permission and an uplift record) to copy at her convenience, and then return.
It is not your responsibility to copy/scan documents for them. If you make them readily available for inspection, they then have the chance to inspect them. I have been on many inspections that have lasted all day or more.
I would suggest to her that it is not practical to scan the invoices and invite her back to conclude what she started.
I have always found the VAT people to be very professional in their approach.
Were your records in a good state? Had glaring errors been found even during the short visit?
I think that the quote is that 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.
Although this seems a very unusual approach there may be good reason for it such as a large number of unusual transactions requiring further investigation.
You may wish to contact your VAT office and enquire as to why copies are required in this form. Certainly whenever I have dealt with cases of this nature they have wanted the original documents not copies. Or to have taken a copy themselves of the original.
However, as the inspector can within reason demand pretty much anything that they require then you may have to comply.
Talk to the VAT office but as I say be prepared not to get the answer that you want.
Please keep us informed as to what happens with this one.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Work has been pretty tough lately, still (but off for Easter) in Brum for a few more weeks and also trying to keep the day job going, as turnover is not good and the company is struggling to say the least!
Have been trying to keep up on here but time just does not allow, but today back in the office so have less pressure!!
This is an excerpt from the inspectors own handbook, look at the 'reasonaly required' at the bottom
CH21620 Information & Inspection Powers: Conditions and safeguards: What we can require or inspect: Reasonably required
Information or an inspection can only be reasonably required where it could affect a persons tax position. If having the information or carrying out the inspection could not affect a persons tax position now or in the future it is not reasonable to require it.
Sometimes it is not possible to know for sure that the information gathered will affect a persons tax position until you get the information or carry out the inspection.
You may face claims that the information you seek does not affect a persons tax position. Such claims may be merited, and you should consider them carefully. But the key test is whether the information is reasonably required for the purpose of checking the tax position, not whether as a matter of fact it turns out to affect the tax position.
However, you must be able to show why seeking the information or carrying out the inspection may help you to
decide what the correct tax position is, or decide how the persons tax position can be corrected, if appropriate, or ensure that the correct amount of tax is paid or overpaid tax is repaid. You can only correct a tax position if you can make an assessment, an amendment or a repayment within the time limits set for making them. You should ensure that you use the appropriate time limits for the particular circumstances.
Reasonably required means getting the balance right between
the burden put on someone to provide the information or face an inspection, and how important the information or inspection is in deciding on the correct tax position. As well as the Human Rights Act considerations, see CH21300, you should consider when to ask for information, see CH21640.
I agree that 1000 invoices seems more than a bit unreasonable. Have a chat with someone in her office as to the best way forwards with this.
As Phillip suggests, see if you can arrange for the job to be finished on site.
whatever you do though, be very very reasonable with them even if they're not being. Upsetting the VAT people is like poking a sleeping tiger with a stick.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Although a slightly different case, one of my clients had a investigation (not VAT) on R&R and HMRC wanted physical copies of all R&R invoices for a specific year. Took me ages to pick them all out and photocopy them but we did, even small Wickes receipts and local DIY ones for under £1!!!!! After receipt of these documents and inspector accepted the accounts with no penalties incurred.
I agree that 1000 invoices seems more than a bit unreasonable. Have a chat with someone in her office as to the best way forwards with this.
As Phillip suggests, see if you can arrange for the job to be finished on site.
whatever you do though, be very very reasonable with them even if they're not being. Upsetting the VAT people is like poking a sleeping tiger with a stick.
