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VATman visits – should I be concerned?

VATman visits – should I be concerned?
Tuesday, October 23, 2018

We all know that strange feeling we get when you’re driving and you spot a police car behind you. Even though you’ve done nothing wrong, there’s always an underlying feeling of guilt and that you might have done something wrong. That’s exactly the same feeling that law-abiding business owners across the country feel whenever they are visited by HMRC.

Being notified that HMRC are on their way can be daunting, but you shouldn’t worry. It is very common for businesses to have HMRC visit them about their VAT. In the vast majority of cases, they will simply look at your records and be on their way.

Legally speaking, HMRC doesn’t have to give you any notice that they are visiting for VAT purposes. However, they do typically give you at least 7 days’ notice. If this isn’t convenient for you, it is possible to request a different time or date for the visit. HMRC isn’t required to accept your request, but they often will if it is for legitimate business or personal reasons.

First and foremost – stay calm

Although it is easier said than done, staying calm is very important in the context of VAT visits. If you’ve done everything by the books and you have a reliable accountant, you have no reason to worry at all.

The officers that visit you presume no guilt before they step through your doors. They’re just there to make sure that you’re doing the right thing as opposed to trying to catch you out.

Why they may have chosen your business

It is important to note that the majority of VAT visits are carried out on a random basis. However, businesses in different sectors will experience a different number of VAT visits over the years. Here are some of the reasons why you might be subject to a VAT visit:

  • You trade in a sector that is well-known for VAT fraud,
  • Somebody has informed HMRC that they should visit your business,
  • The amount of VAT that you have paid is unlike other businesses in the same sector with a similar turnover,
  • You have made a VAT repayment claim when you don’t normally make one,
  • Your regular VAT repayment claim is higher than usual,
  • You have missed several VAT payments in the past,
  • They want to verify who your suppliers and customers are.

As you can see, there are more reasons than just fraud that HMRC might visit your business for.

How often do VAT visits happen?

If your business meets one or more of the criteria listed above, you will likely be subject to more VAT visits than other companies. There is no quota for how many times you should be visited in a given year however – until they write to you, you won’t know.

One-person businesses and microbusinesses are much less likely to be visited by HMRC because, if they are committing fraud, the sums are on a much smaller scale. Naturally, the lack of a potential big reward at the end shifts these businesses further down the priorities list.

What does HMRC do when they’re visiting you?

All they’ll do is ask for all of your VAT records as well as any other general business records to be made available to them. They will want to see your invoices, cloud bookkeeping records, and your till rolls, among other documentation.

What happens after they leave?

At the end of their visit, HMRC will, share their findings with you. They’ll let you know if they have found anything that requires further investigation or anything that they have concerns about. In most cases, this won’t be applicable.

In the event that they do find something wrong, they may issue you with a penalty. However, it is extremely uncommon that this will happen on their first visit.

After their meeting, you can breathe a sigh of relief and go back to business as usual.

VAT with Panthera

If you’re looking for a reliable accountant that will help you make sure that all of your VAT records are kept up-to-date, contact Panthera Accountants. We help business owners across the country keep their businesses compliant with HMRC.

For more information about the other ways that we can help your business, call us on 01235 768 561 or drop us an email to enquiries@pantheraaccounting.com – we’ll be back in touch with you shortly.

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We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

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The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

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I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

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I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

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Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

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