Andrew Needham looks at why HMRC would undertake a VAT inspection and what to expect during a visit.
A business will have a visit from a VAT inspector for one of two reasons; a routine visit after selection by the HMRC computer based on the type of business and the level of turnover, or if the business has an unexpectedly large VAT repayment.
Inspections generated by a repayment return are, in turn, dealt with in one of two ways; either a ‘pre-payment credibility visit’ in which the inspection takes place before the repayment is made, or a ‘post-payment’ visit where the repayment is made and then an inspection is arranged where HMRC perceives the risk to be less.
Risk factors
In either case of a routine visit or a ‘credibility visit’, the frequency and length of the visit are determined by how much risk HMRC considers the
