Shropshire companies who are already facing the challenges the
VAT increase has created could find the VAT man on their doorstep
too.
Keith Winter, of Dyke Yaxley Chartered Accountants, in
Shrewsbury, said in today's climate, the frequency of visits from
the VAT man was increasingly unpredictable.
"There was a time when you could expect a visit once every three
to five years - but now, you could be visited twice in one year or
even once in six years.
"This is because the VAT man is now targeting his resources at
specific sectors at various times."
Keith said the main targets were cash businesses, companies who
did not comply with their returns, large traders, and
investigations into particular trade sectors.
"The move to target specific industries is a way of steadily
raising the level of compliance, sector by sector, and if your
business happens to be in the target group, there's a greatly
increased risk of receiving an unannounced visit."
On an unannounced visit, not surprisingly, the VAT man will turn
up without an appointment, enter your business premises, look at
records, question you (in front of customers), and take away
records to look at in more detail.
"This tactic has been used with pubs and garages in selected
regions, and it looks likely to be used nationwide in other
cash-based businesses and retailers.
"But although the VAT man can demand the production of records
and fine your business if you fail to produce them, their request
has to come at a reasonable time.
"So even though he has extensive powers, he has no authority to
automatically enter your premises if it's inconvenient.
"The VAT man relies on the fact that you'll simply feel you have
no alternative but to let him in and take the records away, and
that you'll naturally assume he has the power to do it.
"You may be happy to co-operate, but you might also have just
opened your premises and be dealing with customers.
"Explain to your visitor that you can't see him at such a busy
time, and ask him to make an appointment to come back later."