This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.


Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

VAT Registration Enquiry

worried Winnie
Joined:Wed Aug 06, 2008 3:44 pm

Postby worried Winnie » Wed Oct 11, 2006 6:34 am

I am sole trader of a cleaning company and also have invested in 3 buy to let flats.
I have received a letter for an Officer of HM Revenue & Customs, in which he proposes to visit me at my home address to discuss my businnes and accounting arrangements, to see if I am eligable to pay VAT.
I have got behind with my accounts and am trying to catch up fast!
I must ensure that all business records are available for inspection!
I have spoken with the Officer to try to arrange to meet at my accountants, but he is very insistent that he needs to visit me at my home so everything is to hand!
I am unhappy about this intrusion. Does he have powers to visit me at home at this stage?
Do you advise I meet him at all?
My accountant seems unconcerned and uninterested
but I am very worried!
I would really apreciate some advice please?

Joined:Wed Aug 06, 2008 3:15 pm

Postby Instinctive » Wed Oct 11, 2006 7:23 am

Buy to let flats income is exempt for VAT purposes and therefore should be ignored.

It seems that you are not yet registered for VAT and therefore I am surprised that HMR&C officer wishes to visit you to inspect your records to check whether you should be registered for VAT.

You need to ascertain precise reason for the visit. In particular, whether this is income tax related or VAT related.

In either event, insist on meeting the officer at your accountant's address to inspect your financial records.

The only reason the officer may insist on seeing you at your business premises (which is your home) is to establish that your business does really exist and to see how your business is operated.

But I do not believe that he/she can insist on inspecting your records at your home/business.

worried Winnie
Joined:Wed Aug 06, 2008 3:44 pm

Postby worried Winnie » Wed Oct 11, 2006 7:42 am

Thanks for your reply Instinctive.

The enquiry is definately VAT related from the Hidden Economy Team!

Great to learn about buy to let flats. I have also developed a cottage and sold it on. I don't suppose the profit from the sale is exempt from VAT as well?

Many thanks

Paul Taylor
Joined:Wed Aug 06, 2008 3:43 pm

Postby Paul Taylor » Wed Oct 11, 2006 8:20 am

You say "developed a cottage". However, I assume you mean "renovated" rather than new build. If so, then the onward sale will be exempt from VAT unless the cottage had been empty for more than 10 years.

The VAT officer can insist on visiting you at your home address if that is where you operate your business from and/or maintain your records. He will want to get a feel for how big the business is and what your level of income is. However, you may then request that the visit move on to your accountants if that is where the books and records are held and maintained.

Instinctive should not be surprised that HMRC are visiting an unregistered business. The Hidden Economy team, also called the Shadow Economy Team, make a large number of visits to unregistered businesses to confirm that they are genuinely trading below the VAT registration threshold.

I would recommend that, prior to the visit, you complete your records and sit down with your accountant or a VAT advisor to determine how much of your income will count toward the VAT registration threshold and, therefore, whether you will need to register for VAT.

If a large percentage of your income is exempt from VAT then it is entirely possible that you need not register.


Paul Taylor
01283 507960

Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen

Postby wamstax » Wed Oct 11, 2006 12:40 pm

Maybe it would help you if you got your books completely updated and then consider the following:-
You become liable to VAT registration under VATA 1994 Schedule 1(1)
(a) at the end of any month, if your taxable supplies value in the period of one year then ending has exceeded £61K (this is called the backward look), or
(b) at any time, if there are reasonable grounds for believing that the value of your taxable supplies in the period of 30 days then beginning will exceed £61K (this is the forward look.

You then notify that liability under VATA 1994 Schedule 1
(i) within 30 days of the end of the relevant month, or
(ii) before the end of the period by reference to which the liability arises.
So, if you apply to be registered on 31 July as your taxable supplies have exceeded the registration limit over the previous year, you will be registered from the end of August, or more likely, 1st September. Earlier dates can be agreed. VAT needs to be charged from the date that you register or should have registered.

Once you have your figures up to date you should have a fair idea if you have been remiss. If you have no liability to VAT then I would suggest that you maintain your stance that any meeting or visit should be to your accountants.
regards and hope this helps
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

Joined:Wed Aug 06, 2008 3:36 pm

Postby Daniya » Thu Oct 12, 2006 1:38 am

Taking into consideration all of the above advice.Have a little chat with your accountant and get his opinion. The meeting can be at your home for various reasons, however if you have nothing to hide, let the VAT inspector come to your house and have a chat with him. Be honest with him and give him as much info as possible, If any info is missing let him know you will supply it asap, once you have had the chance to get it from your accountant( i.e to give you some breathing time).
I can understand if your Accountant is unable to invite them to his office. The main reason may be, I am saying may be due to his fees not being paid on time or not paid at all or may be some other plausable reason.

Return to “Tax Investigations and Enquiries”