VATF33400 | What to consider prior to determining whether to use an intervention: testing credibility: conducting a cash reconciliation exercise

If the taxable person is a cash trader then their spending should always equal the money they have received. By calculating the spending, the declared takings can be verified at visits:

Gross takings + other income paid into the business = money spent.

Before attempting a cash reconciliation it is very important to question the taxable person in detail. From the interview and taxable person’s records, you can construct a schedule of monies in and monies out.

For further guidance on mark-ups and cash reconciliation please see the VAT Control Notes