How to Prepare for an HMRC VAT Inspection
What to expect from an HMRC VAT compliance check, how to prepare your records, and what to do if HMRC finds an error.
Know your rights
HMRC can visit with or without notice for a VAT inspection. You have the right to have an accountant present. HMRC officers can inspect records on your premises; you can request a copy of any document taken.
Keep your records inspection-ready
VAT returns, sales invoices, purchase invoices, bank statements and import/export records must be kept for 6 years. MTD-compatible software automatically maintains the digital audit trail.
Common errors HMRC looks for
Claiming input VAT on private use, claiming VAT on entertaining, missing output VAT on contra-trades, errors in partial exemption calculations.
During the inspection
Answer questions accurately and honestly. If unsure, say so and follow up. Do not volunteer information beyond what is asked. Have your accountant present if possible.