Enter and Inspect
An officer can only enter premises for the purposes of an inspection if the inspection visit has been arranged by agreement with the occupier or approved by the Tribunal.
The power to enter and inspect premises does not give the officer the right to search them for assets or documents. This means that they can look at what there is and can be seen but they cannot look for something that is not visible. HMRC instruct their officers that they can open things to look inside as long as they are not searching for something. They advise that it is preferable to ask the person to open things so that they can inspect the contents.
The officer is not permitted to force entry or to search the premises. There is no right of appeal against an inspection visit but the occupier can refuse entry. If the officer is refused entry, approval for the visit can be sought from the Tribunal.
If the inspection visit has been approved by the Tribunal and the occupier refuses entry on the grounds that the Tribunal could not have been satisfied that the inspection was justified, any challenge to the approval would have to be by way of judicial review. Part 7 of Sch. 36 provides for a penalty to be charged where an occupier refuses entry for an inspection visit that has been approved by the Tribunal.
HMRC provide their officers with the following example of what ‘enter and inspect’ means for these purposes.
- You are walking along a corridor with a representative of the business and come to a door in the corridor. He goes through but the door slips and closes in front of you. You may touch the door to open it and continue.
- You are shown into a room in which the books records and invoices you asked for have been placed on a table for your inspection. You are allowed to open the files and boxes of records that have been collected. You are allowed to walk around and look at the pictures on the wall. You are not allowed to open the filing cabinet in the corner just to see what is in it.
- You are shown into a room in which the accounting records you asked for have been placed on a table for your inspection. You are told the invoices are in the filing cabinet in the corner. You may open the filing cabinet to inspect any invoices that you may want to.
- You are inspecting premises used in connection with taxable supplies and there is a delivery van in the yard waiting to offload goods. You are allowed to open the door – remember health and safety – as means of transport such as cars and vans are, for these purposes, premises. You may look at the boxes inside. You are also allowed to climb inside and look at the boxes you cannot see from outside. You should ask the trader to open any box you want opening so you can check the tax position of what is inside. It should be very rare to want to inspect goods waiting to be sent out for delivery. You are not allowed to open the drivers’ holdall.
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