Warning over new powers for revenue inspectors

Apr 1 2009 by Peter McCusker, The Journal

NORTH East accountants and business advisers RMT are warning local businesses to be prepared for the new powers which HM Revenue & Customs (HMRC) has from today.

Schedule 36 of the Finance Act 2008 is to extend information powers and introduces a new power for HMRC to inspect business premises and records relevant to all direct taxes – not just PAYE and VAT as current powers allow.

Inspections may also take place at short notice of seven calendar days, or no notice where the inspection is either by an authorised officer, pre-approved or where the taxpayer agrees to an immediate inspection. RMT tax partner John Richards said: “The changes coming into place in April give HMRC the authority to request ‘information’ or an explanation, in addition to documents.

“HMRC can also inspect business premises, business assets and business documents on the premises. The inspection powers are of particular concern as taxpayers or the staff left in charge when the business owner is absent may unwittingly agree to an inspection at no notice – without their tax adviser being present.

“Businesses should be aware that the power to inspect business premises does not include the power to force entry, although if the inspection is either by an authorised officer or pre-approved, taxpayers may face a penalty of £300 plus £60 per day for refusing HMRC access.

“If you are contacted by HMRC for a business inspection, it is essential to seek immediate professional advice. This is a significant change, likely to lead to increased inspections.”