Inspection Powers
HMRC have the right to inspect a person's business premises, and any documents in relation to the business, in order to check their tax position. HMRC will normally give at least seven days' notice (unless the person agrees a shorter timescale) . However, it is possible for inspections to take place at shorter, or indeed no notice, if sanctioned by an 'authorising officer'.
It is important to note that these powers only apply to premises used for business. However, if you use part of your your home for business, then that part of your home is classed as business premises . If you have claimed a deduction in your accounts for the use of home for business, it would be very difficult to try and challenge HMRC's right to inspect the part of the premises the cost has been claimed for.
Whilst the powers enable HMRC to inspect the premises, they do not give HMRC the right to search the premises. In addition, as the HMRC website advises their staff:
"You can ask questions to obtain information relating to things you inspect. You cannot use the power to ask wider questions".
However, this does not mean that questions will not be asked informally - and it is important you know your rights about what questions you do, and do not, have to answer when an inspection notice has been issued.
If you receive an inspection notice from HMRC, and require assistance, please contact us.