The Telegraph notes that, as from 1 April, new HMRC powers mean that income and corporation tax inspectors will have the same powers of entry as those used by Customs officials investigating unpaid VAT.
Sue Holmes, head of national tax investigations at Smith & Williamson, is quoted:
"The many thousands of business people and sole traders who claim expenses for 'use of home as an office' should recognise that from next month, HMRC has the right to enter their home without prior warning to inspect business records.
Inspections can be approved by a senior official in a local tax office, Ms Holmes added."
HMRC downplay the likelihood of the abuse of the powers:
"HMRC does sometimes need to access premises connected with businesses to see such things as goods and assets where it is reasonable to do so, to ensure the right tax is being paid. Although HMRC is extending these powers, it is also extending safeguards.
In particular, unannounced visits can only be made with the approval of specially authorised officers."
That would be all well and good, if the authorising officers were outwith HMRC. However, they are part of HMRC therefore an independent check/balance does not exist.
The question is will the temptation to abuse these powers be too much for HMRC?
Tax does have to be taxing.
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