Compliance Checks and Investigations for VAT

HMRC conducts compliance checks to verify the accuracy of indirect tax, primarily VAT, payments.

Compliance Checks

Almost all VAT investigations involve a visit to the business premises to review records and address any questions arising from the review. These visits are typically scheduled in advance, but in exceptional circumstances, HMRC may arrive unannounced.

HMRC will inform the taxpayer beforehand about the records they wish to examine, which may include records for the current year and previous years for which VAT returns have been submitted.

The taxpayer has the right to have their tax advisor, such as Michael Filiou, present to assist in handling questions that may arise.

The relevant legislation governing compliance checks also establishes various limitations on HMRC’s powers during these checks.

At any stage, HMRC may decide to escalate the compliance check into a more thorough tax investigation. This typically occurs when HMRC uncovers significant errors during the compliance check. The new investigation may extend to taxes other than VAT.

VAT Fraud and Evasion

In addition to routine compliance visits to verify VAT compliance, HMRC conducts serious VAT investigations under the procedure set out in Public Notice 160 in cases where they suspect dishonest conduct. These investigations typically involve larger amounts of VAT and suspected fraudulent behaviour by the taxpayer.

How Michael Filiou Can Help

When HMRC carries out a VAT investigation or compliance check, the taxpayer has the right to have a tax advisor, such as Michael Filiou, present to assist in addressing any questions raised by HMRC.

Michael Filiou can act as your advisor for the purposes of the compliance check.

It is crucial for the taxpayer to be aware of the limitations imposed on HMRC by the legislation that introduced compliance checks. Many accounting firms are not fully aware of HMRC’s powers in these circumstances. As a specialist tax investigations firm, Michael Filiou stays up-to-date on the relevant powers and restrictions to ensure that HMRC does not exceed their authorised authority.

Michael Filiou will control the information provided to HMRC without in any way allowing HMRC to claim that you have not been cooperating with the inquiry.

Michael Filiou will discuss any apparent discrepancies between the VAT Returns and the records with you and HMRC with the goal of reaching an agreement with HMRC. Michael Filiou will present arguments to minimise your VAT liability and the penalty charged. Michael Filiou will also ensure that the investigation is handled professionally to protect your reputation.

If HMRC has informed you of their intention to conduct a VAT investigation or compliance check into your business, please contact Michael Filiou for a free, confidential, and no-obligation consultation. Michael Filiou is happy to offer an initial free meeting with prospective clients.

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