Tax inspector
visits to home-based offices

Is part of your residence being used for business purposes?

From April 2009, new laws will provide HM Revenue and Customs (HMRC) with the power to visit home-based offices. Tax inspectors can visit a home if part of the residence is being used for business purposes, which is likely to impact on thousands of people who now remotely work or run their small business from their home residence.

HMRC will still only be able to run an inspection at home-based offices if they think that it’s “reasonably required.” Understandably some people are concerned about one point that’s expected to come into force, that the home-business owner will no longer be able to object to the visit, even though they may only be given 24 hours’ notice.

Refusing to let a tax inspector into your business premises can result in a fine. So you should make sure that your accounts are up to date at all times and ready in case you are subject to a visit.

Keeping financial records current and accurate is essential for the daily operations of any business. It’s important that you know the exact current position of your finances.

The reasons your business might be chosen for an inspection are numerous and wide-ranging. Whatever the reason, one thing’s certain, you need to make sure that your record keeping and accounting practices are in good order.

An inspector will want to know everything about your operations as well as viewing your records. You will need to produce original documents such as invoices, receipts and bank statements. But you should also be keeping a detailed record of calculations made when filling out tax returns.

The inspectors will aim to give you advice and help during their visit. This will later be backed up with written documentation. But, if you want to save yourself time and money, ensure that there are no faults to be found in the first place.