I actually attended a PAYE inspection with same client a few weeks ago and had to charge him. He hasnt paid me for that yet, although I know he will. I said I would be there but that he couldnt really afford for me to be all day and I actually had another meeting with another client. Indeed the Accountant told him not to have either of us there! I gave him all the files of paper along with copies of the VAT return in paper format, plus detailed VAT return workings in dropbox. The (wicked VAT inspector) told him it wasnt good enough that I wasnt there, she was disgusted and that I WOULD be next time! Also she has insisted he buy a printer to print the detailed VAT workings out. She then also told him she would be making sure he was involved in a Corporation Tax inspection.
She is insisting on records from 2010 (which is a fair point) but his Accountant only took over 2years ago, just after me, when his old Accountant missed filing deadlines and incurred fines and they have refused to provide anybody with copies of anything, so he is between a rock and a hard place. She says if he doesnt get the paperwork to her by Tuesday next week he will pay a fine of £300 per day until he does.
Ive attended VAT inspections before - just didnt know it was the law (according to this inspector!!)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you Mark. I've told my client he absolutely must ring the Accountant first thing on Monday and get his advice. Unfortunately he doesn't have tax investigation insurance, although some of my clients do. I will certainly be pushing for my others to get it (especially now after hearing about the extremely agressive bullying stance of this inspector). I've not heard it mentioned by all the Accountants my clients work with, do you have a company you can recommend?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
That sounds very aggressive from the Inspector - what exactly do they suspect your client of having done?
And is there any way it is the prior accountant they are chasing and think that there may be some form of Money Laundering having happened during that accountants tenure?
You really need the current Accountant in on this pronto - with proof that requests for information were made and denied on hand-over. Then sic the Inspector on the old Accountant!
He told me she was aggressive from the very minute she walked through his door, so now idea what her beef was and she just kept telling him it wasnt good enough! He had all the detailed VAt reports in dropbox but she said he hadnt made them available! She advised she wasnt allowed to touch his computer but he said he would open them for her and do anything else necessary. Sounds like he couldnt do right for doing wrong. She certainly didnt accuse him of anything, just ranted. You may have hit the nail on the head - it could be the prior accountant they are chasing - they NEVER responded to any calls I, nor my client nor his new accountant made to them. In fact my client sent them a cheque to the address on their invoice and when they chased it they told him they hadnt worked there for 2 years - so I found that disturbing at the time. I suggested he find someone else, which is what he did. Thank you for the advice Theresa. I will await Monday morning with bated breath!
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thank you Mark. I've told my client he absolutely must ring the Accountant first thing on Monday and get his advice. Unfortunately he doesn't have tax investigation insurance, although some of my clients do. I will certainly be pushing for my others to get it (especially now after hearing about the extremely agressive bullying stance of this inspector). I've not heard it mentioned by all the Accountants my clients work with, do you have a company you can recommend?
Not sure if the tax insurance companies give cover directly or not but you can ask. I use TaxWise for my all client cover. Other main players are CCH and AbbeyTax. You could give them a call and ask if they provide insurance directly to the end user.
He told me she was aggressive from the very minute she walked through his door, so now idea what her beef was and she just kept telling him it wasnt good enough! He had all the detailed VAt reports in dropbox but she said he hadnt made them available! She advised she wasnt allowed to touch his computer but he said he would open them for her and do anything else necessary. Sounds like he couldnt do right for doing wrong. She certainly didnt accuse him of anything, just ranted. You may have hit the nail on the head - it could be the prior accountant they are chasing - they NEVER responded to any calls I, nor my client nor his new accountant made to them. In fact my client sent them a cheque to the address on their invoice and when they chased it they told him they hadnt worked there for 2 years - so I found that disturbing at the time. I suggested he find someone else, which is what he did. Thank you for the advice Theresa. I will await Monday morning with bated breath!
While I don't think the aggressive stance is warranted just wanted to pick out one thing you mentioned.
Inspectors are not legally allowed to look at documents on a computer, or handle a computer on the clients premises. It is, unfortunately, a requirement of an inspection that everything - and I do mean everything - is printed out, preferably in advance. It's why, if you scan documents and store 'paperwork' that way you need to scan both sides of every document, even if the reverse is blank. Had that confirmed at the ICB conference last month by the HMRC rep.
So while it might be a nice concept to scan and throw - don't do it guys! We are not up with the Americans on this one - keep those boxes of paper for a few years yet!
Interesting! Wish they had put that in his letter as at least that part couldve been headed off at the pass so to speak! Mind you maybe they did - I didnt see the letter but I did ask a few times for what was in it/what they wanted. Ive had another VAT inspection for a client who works from home but all his stock is in a storage unit - we had the meeting at the storage unit so I took it ALL as prints, as he had no laptop plus we had no access to internet in this storage container like place anyhow.
Going to be interesting for those app developers who say you can scan all receipts and throw them away. I keep seeing one advertising on FB (- really annoying ad - they have a coffee shop receipt which Ive said I think could mis-lead and Ive mentioned that on their app they dont allow for taking piccies of the reverse even if its blank as you say.)
I also know they often play good cop, bad cop but it did sound a bit excessive.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Inspectors are not legally allowed to look at documents on a computer, or handle a computer on the clients premises. It is, unfortunately, a requirement of an inspection that everything - and I do mean everything - is printed out, preferably in advance.
Interesting.
My understanding vaguely matches your first sentence - but the rest is news to me.
It vaguely matches, because what I thought (borne out by experience) is that they aren't allowed to access the computers (I presume to avoid the risk or any accusations of interfering with the data stored on them), but that they can view things on screen - someone else must be available to 'operate' the machines - and emailing the PDF reports to them for viewing on their own device is also acceptable.
I say borne out by experience, because I have attended a VAT inspection - some years ago - where this was done. That was just the actual accounts data, though - not scans of supplier invoices, etc., for which originals were kept by this company.
It's why, if you scan documents and store 'paperwork' that way you need to scan both sides of every document, even if the reverse is blank. Had that confirmed at the ICB conference last month by the HMRC rep.
I currently have a client who uses a cloud-based accounting system, which allows storage of PDF documents - he therefore likes to scan every receipt, embed the image in a PDF for upload and bin the originals, to offload storage entirely to a third party.
That's very trusting of him - and I have expressed my cynicism! I also had doubts about whether he should even be doing this originally, but I've since established he can. However, scanning both sides is a new one - and a quick search later shows:
From http://www.hmrc.gov.uk/record-keeping/#2
"HMRC recommend you keep all the original documents you receive. This does not mean you need to keep them on paper. Most records can be scanned and kept electronically on a computer or a storage device such as a CD or memory stick. Make sure that whatever you use to keep records you:
have both the front and back of documents
can easily access them so you can pass them to HMRC"
I'll have to point that out to him.
Note: That just says front and back and doesn't clarify if it's necessary even if the back is blank - I suspect it's just a case of trying to write it in simple language, avoiding ifs and buts, because sometimes important information is on the rear. (On the other hand, this is HMRC...)
-- Edited by VinceH on Sunday 16th of November 2014 11:17:58 AM
__________________
Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Hi Vince I have read somewhere that you have to scan the back even if its blank (although for the life of me now I cant recall where) and Im sure it was mentioned on one of my early VAT webinars/seminars (when I set up my own company - not the bookkeeping one).
He did offer to open the documents for them on his PC and indeed I said to email the docs to them if they wished. Indeed the only thing online are the VAT detailed reports from Sage, EVERTHING else is paper based.
Now I come to think of it the PAYE inspector a few weeks ago (same customer) viewed the reports from Payroll Manager online, which included payslips etc, which I also had saved in dropbox for the purpose - he didnt touch the laptop but he had no issue with it at all.
So they were easily accessible to them.
I will be encouraging all my clients even more to keep things (although there is still no telling some peeps!!!)
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
If you are a member of the FSB, the membership fee includes insurance to cover inspections !! They also have free business banking and some very good AE offerings for members. I have personally used there legal helpline on a few occasions.
This isnt an advert but the savings can cover the membership costs !
............................ Note: That just says front and back and doesn't clarify if it's necessary even if the back is blank - I suspect it's just a case of trying to write it in simple language, avoiding ifs and buts, because sometimes important information is on the rear. (On the other hand, this is HMRC...)
-- Edited by VinceH on Sunday 16th of November 2014 11:17:58 AM
Maybe to prove there was nothing on the blank side.
