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Contact: michael.firth@taxbar.com
Procedure.Tax
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I-8: Power to inspect premises
Premises
Includes means of transport
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"“premises” includes—
(a) any building or structure,
(b) any land, and
(c) any means of transport," (FA 2008, Sch 36, para 58)
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Power to inspect taxpayer's business premises
"(1) An officer of Revenue and Customs may enter a person's business premises and inspect—
(a) the premises,
(b) business assets that are on the premises, and
(c) business documents that are on the premises,
if the inspection is reasonably required for the purpose of checking that person's tax position." (FA 2008, Sch 36, para 10(1))
No power to enter premises used solely as a dwelling
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"(2) The powers under this paragraph do not include power to enter or inspect any part of the premises that is used solely as a dwelling." (FA 2008, Sch 36, para 10(2))
Business assets
"“business assets” means assets that an officer of Revenue and Customs has reason to believe are owned, leased or used in connection with the carrying on of a business by any person (but see sub-paragraph (4)),
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"(4) For the purposes of this Schedule, “business assets” does not include documents, other than—
(a) documents that are trading stock for the purposes of Chapter 11A of Part 2 of ITTOIA 2005 (see section 172A of that Act), and
(b) documents that are plant for the purposes of Part 2 of CAA 2001." (FA 2008, Sch 36, para 10(3), (4))
Business
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"(1) In this Schedule (subject to regulations under this paragraph), references to carrying on a business include—
(a) the letting of property,
(b) the activities of a charity, and
(c) the activities of a government department, a local authority, a local authority association and any other public authority.
(1A) A person who under section 41 of FA 1996 is liable to pay landfill tax charged on a taxable disposal is treated for the purposes of this Schedule (subject to regulations under this paragraph) as carrying on a business.
(2) In sub-paragraph (1)—
“local authority” has the meaning given in section 999 of ITA 2007, and
“local authority association” has the meaning given in section 1000 of that Act." (FA 2008, Sch 36, para 60)
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Business documents
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"“business documents” means documents (or copies of documents)—
(a) that relate to the carrying on of a business by any person, and
(b) that form part of any person's statutory records," (FA 2008, Sch 36, para 10(3))
Business premises
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"“business premises”, in relation to a person, means premises (or any part of premises) that an officer of Revenue and Customs has reason to believe are (or is) used in connection with the carrying on of a business by or on behalf of the person." (FA 2008, Sch 36, para 10(3))
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Tax position
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"(5) In sub-paragraph (1), the reference to a person's tax position does not include a reference to a person's position as regards soft drinks industry levy." (FA 2008, Sch 36, para 10(5))
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See further I-3: Taxpayer notices
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Power to inspect third party's business premises
"(1) An officer of Revenue and Customs may enter business premises of an involved third party (see paragraph 61A) and inspect—
(a) the premises,
(b) business assets that are on the premises, and
(c) relevant documents that are on the premises,
if the inspection is reasonably required by the officer for the purpose of checking the position of any person or class of persons as regards a relevant tax.
(2) The powers under this paragraph may be exercised whether or not the identity of that person is, or the individual identities of those persons are, known to the officer." (FA 2008, Sch 36, para 10A(1) - (2))
No power to enter premises used solely as a dwelling
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(3) The powers under this paragraph do not include power to enter or inspect any part of the premises that is used solely as a dwelling." (FA 2008, Sch 36, para 10A(3))
Involved third party
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See table in FA 2008, Sch 36, para 61A
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Relevant documents
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"(4) In relation to an involved third party, “relevant documents” and “relevant tax” are defined in paragraph 61A." (FA 2008, Sch 36, para 10A(4))
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Relevant tax
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See table in FA 2008, Sch 36, para 61A
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Power to inspect premises used in connection with VAT supplies
"(1) This paragraph applies where an officer of Revenue and Customs has reason to believe that—
(a) premises are used in connection with the supply of goods under taxable supplies and goods to be so supplied or documents relating to such goods are on those premises,
(b) premises are used in connection with the acquisition of goods from other member States under taxable acquisitions and goods to be so acquired or documents relating to such goods are on those premises, or
(c) premises are used as or in connection with a fiscal warehouse.
(2) An officer of Revenue and Customs may enter the premises and inspect—
(a) the premises,
(b) any goods that are on the premises, and
(c) any documents on the premises that appear to the officer to relate to the supply of goods under taxable supplies, the acquisition of goods from other member States under taxable acquisitions or fiscal warehousing.
(4) Terms used both in this paragraph and in VATA 1994 have the same meaning here as they have in that Act." (FA 2008, Sch 36, para 11(1), (2), (4))
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No power to enter premises used solely as a dwelling
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"(3) The powers under this paragraph do not include power to enter or inspect any part of the premises that is used solely as a dwelling." (FA 2008, Sch 36, para 11(3))
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Procedure for carrying out inspection
Agreement or notice required
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"(1) An inspection under paragraph 10, 10A or 11 may be carried out only—
(a) at a time agreed to by the occupier of the premises, or
(b) if sub-paragraph (2) is satisfied, at any reasonable time.
(2) This sub-paragraph is satisfied if—
(a) the occupier of the premises has been given at least 7 days' notice of the time of the inspection (whether in writing or otherwise), or
(b) the inspection is carried out by, or with the agreement of, an authorised officer of Revenue and Customs." (FA 2008, Sch 36, para 12(1) - (2))
Notice following authorised officer approval
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(3) An officer of Revenue and Customs seeking to carry out an inspection under sub-paragraph (2)(b) must provide a notice in writing as follows—
(a) if the occupier of the premises is present at the time the inspection is to begin, the notice must be provided to the occupier,
(b) if the occupier of the premises is not present but a person who appears to the officer to be in charge of the premises is present, the notice must be provided to that person, and
(c) in any other case, the notice must be left in a prominent place on the premises.
(4) The notice referred to in sub-paragraph (3) must state the possible consequences of obstructing the officer in the exercise of the power.
(5) If a notice referred to in sub-paragraph (3) is given in respect of an inspection approved by the tribunal (see paragraph 13), it must state that the inspection has been so approved." (FA 2008, Sch 36, para 12(3) - (5))
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Authorised officer
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"A reference in a provision of this Schedule to an authorised officer of Revenue and Customs is a reference to an officer of Revenue and Customs who is, or is a member of a class of officers who are, authorised by the Commissioners for the purpose of that provision." (FA 2008, Sch 36, para 59)
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Power to inspect for the purposes of valuing, measuring or determining character (including dwellings)
Powers
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Valuation reasonably required for income tax and corporation tax purposes
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"(1) An officer of Revenue and Customs may enter and inspect premises for the purpose of valuing the premises if the valuation is reasonably required for the purpose of checking any person's position as regards income tax or corporation tax." (FA 2008, Sch 36, para 12A(1))
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Valuation, measurement or determination of character for purposes of other taxes
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"(2) An officer of Revenue and Customs may enter premises and inspect—
(a) the premises, and
(b) any other property on the premises,
for the purpose of valuing, measuring or determining the character of the premises or property.
(3) Sub-paragraph (2) only applies if the valuation, measurement or determination is reasonably required for the purpose of checking any person's position as regards—
(a) capital gains tax,
(b) corporation tax in respect of chargeable gains,
(c) inheritance tax,
(d) stamp duty land tax,
(e) stamp duty reserve tax, or
(f) annual tax on enveloped dwellings." (FA 2008, Sch 36, para 12A(2) - (3))
Persons assisting HMRC may enter
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"(4) A person who the officer considers is needed to assist with the valuation, measurement or determination may enter and inspect the premises or property with the officer." (FA 2008, Sch 36, para 12A(4))
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Procedure
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"(1) An inspection under paragraph 12A may be carried out only if condition A or B is satisfied.
(2) Condition A is that—
(a) the inspection is carried out at a time agreed to by a relevant person, and
(b) the relevant person has been given notice in writing of the agreed time of the inspection.
(4) Condition B is that—
(a) the inspection has been approved by the tribunal, and
(b) any relevant person specified by the tribunal has been given at least 7 days' notice in writing of the time of the inspection." (FA 2008, Sch 36, para 12B(1), (2), (4))
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Relevant person
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"(3) “Relevant person” means—
(a) the occupier of the premises, or
(b) if the occupier cannot be identified or the premises are vacant, a person who controls the premises." (FA 2008, Sch 36, para 12B(3))
Notice must state consequences of obstructing
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"(5) A notice under sub-paragraph (4)(b) must state the possible consequences of obstructing the officer in the exercise of the power." (FA 2008, Sch 36, para 12B(5))
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Notice must state if it is approved by the Tribunal
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"(6) If a notice is given under this paragraph in respect of an inspection approved by the tribunal (see paragraph 13), it must state that the inspection has been so approved." (FA 2008, Sch 36, para 12B(6))
HMRC to produce evidence of authority on request
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(7) An officer of Revenue and Customs seeking to carry out an inspection under paragraph 12A must produce evidence of authority to carry out the inspection if asked to do so by—
(a) the occupier of the premises, or
(b) any other person who appears to the officer to be in charge of the premises or property." (FA 2008, Sch 36, para 12B(7))
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Tribunal approval of premises inspection notices
"(1) An officer of Revenue and Customs may ask the tribunal to approve an inspection under this Part of this Schedule (and for the effect of obtaining such approval see paragraph 39 (penalties))." (FA 2008, Sch 36, para 13(1))
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Conduct of approval hearing
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"(1A) An application for approval under this paragraph may be made without notice (except as required under sub-paragraph (2A))." (FA 2008, Sch 36, para 13(1A))
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Condition for approval
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"(2) The tribunal may not approve an inspection under paragraph 10, 10A or 11 unless—
(a) an application for approval is made by, or with the agreement of, an authorised officer of Revenue and Customs, and
(b) the tribunal is satisfied that, in the circumstances, the inspection is justified.
(2A) The tribunal may not approve an inspection under paragraph 12A unless—
(a) an application for approval is made by, or with the agreement of, an authorised officer of Revenue and Customs,
(b) the person whose tax position is the subject of the proposed inspection has been given a reasonable opportunity to make representations to the officer of Revenue and Customs about that inspection,
(c) the occupier of the premises has been given a reasonable opportunity to make such representations,
(d) the tribunal has been given a summary of any representations made, and
(e) the tribunal is satisfied that, in the circumstances, the inspection is justified." (FA 2008, Sch 36, para 13(2), (2A))
No opportunity for representations if occupier cannot be identified
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"(2B) Paragraph (c) of sub-paragraph (2A) does not apply if the tribunal is satisfied that the occupier of the premises cannot be identified." (FA 2008, Sch 36, para 13(2B))
Tribunal decision on approval is final
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"(3) A decision of the tribunal under this paragraph is final (despite the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007)." (FA 2008, Sch 36, para 13(3))
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Power to mark assets
"The powers under Part 2 of this Schedule include—
(a) power to mark business assets, and anything containing business assets, for the purpose of indicating that they have been inspected," (FA 2008, Sch 36, para 17)
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Power to record information
"The powers under Part 2 of this Schedule include—
(a) power to mark business assets, and anything containing business assets, for the purpose of indicating that they have been inspected, and
(b) power to obtain and record information (whether electronically or otherwise) relating to the premises, [property, goods,]1 assets and documents that have been inspected." (FA 2008, Sch 36, para 17)
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No right to inspect document that could not be required under information notice
"An officer of Revenue and Customs may not inspect a business document under Part 2 of this Schedule if or to the extent that, by virtue of this Part of this Schedule, an information notice given at the time of the inspection to the occupier of the premises could not require the occupier to produce the document." (FA 2008, Sch 36, para 28)
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See I-3: Taxpayer notices
See I-6: Limits on information notices
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