HMRC Myth Busting – what powers do they really have?

In Advice and tips by Caroline

When faced with a HMRC tax inspection, you would be forgiven for thinking that they have the right to access your entire premises and any documents. In fact, this isn’t the case. Read on to learn what the real facts are and how your accountant could step in and help with enforcing the limits.

Being confronted by HMRC in an unannounced visit can be unnerving at best. With a strong personality and the backing of the government, in the heat of the moment, it is easy to be persuaded to reveal more than you need to. Let’s look at the misconceptions.

Fact or Myth? HMRC inspectors can enter our premises when making an unannounced visit

MYTH – HMRC actually have no right to enter a property if refused. If HMRC were to spring an inspection, then they do not have the powers to enter forcibly.

Fact or Myth? HMRC can have free rein in your premises and uncover documents

MYTH – If you do invite the HMRC Inspector into your business then you should be aware that HMRC do not have powers to uncover documents via a search. Unless they have a warrant, they can only inspect documents that are already visible to the eye, but cannot conduct a search of the premises.

Fact or Myth? HMRC can inspect any document they request

MYTH – This is not true. There are documents, such as those older than six years, those protected by legal privilege and tax advice, that cannot be inspected.

Fact or Myth? HMRC can interview employees

MYTH – HMRC does not have the power to do this. In fact management has the opportunity to minimise the impact of an inspection on the team by taking the HMRC inspector into a private room to discuss the matter. Management can and should also call their accountant to assist.

Avoid inspections from HMRC

Proper record keeping can prevent the need for HMRC to pay a visit at all. At Barnett Ravenscroft, we work closely with our clients to ensure accurate and timely management of all tax affairs. But in the unlikely event that an inspection was required, we’d support the process and help it come to the best possible conclusion. Get in touch to discuss how we can help you.