CH206500 - How to do a compliance check: starting a compliance check: cross-tax working
The aligned information and inspection powers provided by FA08/SCH36 and CEMA79 enable HMRC to coordinate and combine compliance checks into different taxes where this is the most efficient way to address risks. These checks will also be less time consuming for HMRC’s customers than separate check into each tax.
When planning you compliance check, you should consider, and discuss with your manager and/or team leader, the benefits of extending it into another tax regime. This could enable
- pooling of risk information and expertise
- a whole view of the taxpayer
- joint meetings
- joint inspections
- coordinated requests for information
- comprehensive evidence upon which to judge behaviour for penalty purposes, and
- combined PLR for the purposes of identifying suitable cases for Publishing the Details of Deliberate Defaulter, see CH500400.
When you identify a risk outside of your tax regime or area of expertise you need to complete a Cross-Tax Activity Document - see Cross Tax Activity Guidance. This will allow Risk & Intelligence Service (RIS) to get the right resources to extend the check.
If you are visiting or meeting the person with compliance officers from other disciplines you should make it quite clear to the person and their agent (if there is one),
- who you are
- which taxes or duties you are asking the person about and
- under what legislation you are acting.
Be careful to work within the appropriate legal powers. You must use the information and inspection powers that are relevant to the tax or duty being checked, see CH201100. For example, you cannot use powers under CEMA79 when checking a person’s VAT position, and, on a VAT assurance visit you should not attempt to address any Income Tax risks, unless you are trained to do so. Instead, you should use the liaison and referral processes in place so that the Income Tax risk can be addressed.
