CH254010 | How to do a compliance check: using inspection powers: unannounced inspections: when they may be needed

The power to carry out inspections without advance notice is vital to enable HMRC to tackle the hidden economy and other serious non-compliance.

However, in order to ensure that our actions are reasonable and proportionate in relation to the risk, an unannounced visit must only be made where:

• there is a clear operational need to avoid giving advance notice of an intended visit, and

• the intrusion and potential inconvenience is justified to achieve HMRC’s aims, see CH21360

If the tax position can be established in a less intrusive manner an unannounced visit is not appropriate. Further guidance on the Human Rights Act can be found at CH21300.

An unannounced visit could be necessary where:

• persons have repeatedly missed appointments

• deliberate understatement will only be evidenced if the visit is unannounced, for example:

• failure to register for VAT

• failing to operate PAYE

• suppressing cash takings

• trading in a second, off-book activity

• MTIC and Labour Provider fraud

• there is a risk that the business may have been established to obtain tax repayments fraudulently

An unannounced inspection must be authorised, see at CH254020.