VAT Inspection - What to expect?!

**chrisk999** · 07-01-05

I've just got a phone call saying I'm the lucky winner of a VAT inspection on Tuesday (10am - 4pm ?! surely it doesn't take that long...?!).

This being my first inspection, what do I have to look forward to? Is there anything you wish you'd known before your first inspection?

**stevesa** · 07-01-05

See u in 3 years when you get let out m8 ;-)

**Keith** · 07-01-05

i'm not yet Vat registered but as it will be sooner rather than later i've been reseaching this page looks to have some sound advice http://www.is4profit.com/busadvice/c...inspection.htm

**Mogga** · 07-01-05

Let us know how it goes

**999gi** · 07-01-05

Not had one either but spent a lot of time when first registered trying to get it right and one thing is clear is that most of the people didnt understand the business and had different views on the various treatments so I hope you get someone who knows the business or at least someone you can persuade to check with head office on matters

A few pointers

- your business is probably best descibed as "advertising" (the fact that its performance based commission doesnt really matter).

- you'll need proper invoices for your sales - either proper self bill invoices or your own invoices to independents - not scrappy reports off the CJ system say - for CJ make invoices to their US address for each payment

**renegade** · 07-01-05

You probably just drew the short straw unless something flagged up on their system which they want to check.

You'll hear all sorts of scare stories about not offering them cups of tea or chocolate biscuits but when my ex-boss had a visit 2 people turned up, they stayed a couple of hours, asked a few questions, drank a couple of cups of tea and left, no comebacks.

Just spend some time getting your records in order and to hand.

**zapo31** · 07-01-05

It depend on how many invoices you do
and if you have acounted for your vat correctly

my first one took 2 days he was a right w~@{},r
( i had about 4-5000 invoices a shed load of bills
lots of imports from all over the world)

all he found wrong was £100 in 3 years

got a small fine had to pay accontant few quid to sort it out

lost a night sleep

they like to find somthing

in the last 10 years i have had 3

the other times all ok

**matbennett** · 07-01-05

Last VAT inspection that I was "blessed" with being party to took 3 days. Seriously thought about gaffa taping taping up the vicious little midget and locking her in the safe by the end of it.

Incidentally, my role was mostly trying to explain how online business works. Clueless.

**renegade** · 07-01-05

Originally posted by 999gi
... for CJ make invoices to their US address for each payment

Isn't there a UK office address for sterling accounts?

**999gi** · 07-01-05

If you use the CJ UK address then you'll have to include VAT
As CJ dont add VAT you'll have to gross down

**zapo31** · 07-01-05

It depend on how many invoices you do
and if you have acounted for your vat correctly

my first one took 2 days he was a right w~@{},r
( i had about 4-5000 invoices a shed load of bills
lots of imports from all over the world)

all he found wrong was £100 in 3 years

got a small fine had to pay accontant few quid to sort it out

lost a night sleep

they like to find somthing

in the last 10 years i have had 3

the other times all ok

**chrisk999** · 07-01-05

Tell you what - if it takes 3 days I won't be a happy bunny - I'm going back to uni on Wednesday...

Looks like I'm going to have to endure the usual "so what does your company do" question and try to explain affiliate marketing to someone who insists his email address is simply "www.hmce.gov.uk"!

Fingers crossed

Thanks for all the replies!

**getvisible** · 07-01-05

You probably just drew the short straw unless something flagged up on their system which they want to check.

nah, apparently they investigate everyone in the frist 7 years. If your business has been going three years then they start taking a close eye, unless you have got something suspicisous looking going through.

**Supercod** · 07-01-05

Don't worry about it mate, long as you not doing anything wrong it be fine.

When I started UK Internet Sites Ltd they visited me "before" I got the VAT number.. The reason was we where listed as "Other computer related activities" and at the time some dude done a scam to rob the VAT of millions of pounds.. So the office I came under was a bit jumpy on computer related stuff

Anyway over a year later they wanted to come and do VAT inspection. Turned up at my door as I was ready to go out and I told them that need to come another day, so they did the next day, I called my accountants told about them just turning up and they said is was very common and like you I have just been pulled out the hat. As I also lived where I worked at the time I was within my rights not to let them in as I had no notice, would have if I wasn't going out.

Anyway they came along, wanted to know what we did, I sat them down showed them the sites, explained how it work. They kept asking if I sold computer hardware to Europe for some reason, but as I was only doing Affiliate sites and domain names and hosting at the time was not a big deal. Anyway it was all fine and dandy and they left and that was that.

What's really important is that you get all your bank statements in order, get your cheque book stubs out and have your invoices ready should they wish to see them. Having your vat returns in a neat place, and a tidy office all add to the feeling of a controlled business that's trying to do things right.

You’re going to have to explain how you invoice and how you are invoiced, and if you’re using sage or books for you accounts have them ready for them to see.

Remember they are looking for crooks, however I have heard of story’s that people get caught up in things when they have not been done anything wrong, but hey we all heard them. I have 2 separate insurances one free with my FSB membership and one with my accountants should an investigation go from a quick check to a full blown review, as I been told that even if you do no wrong these can last months and cost you thousands, mind you that might have been the dude selling me the insurance that made that up LOL

**drivetowin** · 07-01-05

As long as you've got everything to hand you should have no problems - and if you havent dont worry too much as long as you can find it - they do give you time - they asked for one invoice I couldnt find at the time and gave me 14 days to post it to them.

When I last had a VAT inspection the woman got upset cos I'd reclaimed my VAT on off street parking - "not allowed" - she said - "yes it is" - I said

She sent me a bill for a couple of hundred quid - I appealed and about three months later got a grovel letter saying I was right and I could reclaim VAT on off street parking