What to expect when HMRC make an unannounced visit

Firstly ask the officer to produce their identification and take a note of their name and contact details.

Request a copy of the search warrant as this will confirm the scope of the search and will determine the constraints under which the search must operate within. If you have an agent or solicitor, send a copy of the warrant to them as soon as you are able to do so.

Where an agent or solicitor is acting, ask the officer to speak with them on the phone shortly after they arrive and before the search commences so the agent can understand the purpose of the visit.

Should a client of Menzies ever be subject to an unannounced visit then we would make our way immediately to the location of the search in order to chaperone HMRC officers during the visit and support our client, and we would request that the search is paused until our arrival.

Before a search can be undertaken HMRC must obtain a search warrant. A search warrant must be ordered by a Circuit Judge or Justice of the Peace, no more than 14 days before the search, in accordance with the Police and Criminal Evidence Act and only take place within the dates and times shown on the warrant. Details of those attending including any police officers or bailiffs as well as HMRC officers will also be included.

The search warrant may include details of why the search has been requested which will give the taxpayer an indication of what HMRC are looking for.

Search warrants can only be challenged by way of judicial review into the decision by the Court to grant the warrant. In most cases this is unlikely to be a viable option for the business due to the relevant costs involved of bringing a case through the judicial review process.

HMRC officers may inspect, copy and remove the business records including statutory books, business books and papers, PAYE, VAT and any other documents that form part of the business records of the taxpayer. This includes records stored electronically as well as hard copy records. It is important to note that HMRC officers must provide a receipt for any items (records or assets) removed.

The business should never destroy or conceal documents during the visit. The destruction or concealment of tax related documents not only attracts a financial penalty but can amount to a criminal offence. Furthermore, it is not advisable to physically try to prevent a search from happening.

HMRC cannot inspect or remove documents that are not relevant to their search or those that are protected by legal privilege such as correspondence between the client and their lawyers, provided the communications are for the purpose of seeking and receiving legal advice.

HMRC cannot interview the business owner or staff, or ask questions irrelevant to their search so a note should be made of any questions HMRC raise during their visit.

Quite understandably no business would ever welcome an unannounced visit from HMRC and even those most prepared will experience a degree of stress when a visit does take place. That said, failing to prepare for the eventuality will only make matters worse so all business owners should consider the following two questions:

1. Do my staff know what to do if HMRC turn up unannounced with a search warrant?
2. Can and how do I contact my advisers urgently when I need them?

Many businesses benefit from having a written policy in place to deal with such an eventuality so all relevant parties can familiarise themselves with how to respond should HMRC ever come knocking.