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Are You Ready for a VAT Inspection?
Are You Ready for a VAT Inspection?
June 3, 2025
Be Prepared. Stay Compliant. Avoid Penalties.
A VAT inspection by HMRC can happen at any time, and often with minimal notice. Whether you’re a start-up or a seasoned enterprise, being inspection-ready is not just about ticking boxes — it’s about demonstrating financial integrity and control.
Use this checklist to assess your VAT compliance status and prepare for a smooth review.
1. Are Your VAT Returns Accurate and Timely?
☐ All returns submitted by the deadline for the last 12 months
☐ No unexplained variances in figures (e.g. large refunds or corrections)
☐ All supporting documents retained and reconciled with submissions
2. Do You Maintain Proper Records for All Transactions?
☐ Sales and purchase invoices stored for 6 years (digital or hard copy)
☐ VAT numbers of suppliers/customers verified where applicable
☐ All invoices meet HMRC requirements (correct VAT breakdowns, date, company details)
☐ Clear audit trail linking invoices to bank transactions and VAT returns
3. Are You Applying the Correct VAT Rates?
☐ Standard, reduced, zero-rated, and exempt supplies properly classified
☐ Reverse charge applied correctly for construction or international services
☐ Margin schemes, flat rate schemes or partial exemption rules (if applicable) accurately implemented
☐ No accidental duplication or under-claiming of VAT
4. Are You Compliant with Making Tax Digital (MTD)?
☐ MTD-compatible software (e.g. Xero, QuickBooks, Sage) is in use
☐ Digital links maintained throughout your record-keeping and filing process
☐ VAT returns filed via MTD-compliant channels
☐ No manual transposition of data or disconnected spreadsheets
5. Have You Reviewed Reclaims and Deductions?
☐ Input VAT reclaims are supported by valid invoices
☐ Business vs personal expense allocations clearly documented
☐ VAT reclaimed only where appropriate (e.g. entertainment, motor expenses, employee reimbursements checked)
☐ Foreign VAT not claimed unless under approved schemes
6. Have You Reviewed Reclaims and Deductions?
☐ Input VAT reclaims are supported by valid invoices
☐ Business vs personal expense allocations clearly documented
☐ VAT reclaimed only where appropriate (e.g. entertainment, motor expenses, employee reimbursements checked)
☐ Foreign VAT not claimed unless under approved schemes
7. Do You Have Professional Support in Place?
☐ You’ve undergone a recent VAT health check or compliance review
☐ Your accountant/bookkeeper provides regular VAT advice
☐ You’re prepared for representation in case of an HMRC dispute or review
If You’ve Ticked Fewer Than 6 Boxes…
You may be at risk of non-compliance, penalties, or extended reviews. We strongly recommend a VAT pre-inspection review to resolve issues before HMRC finds them.
Book Your VAT Compliance Review Today
Call: 020 7164 6399
Email: noxxfusion@gmail.com
Office: 4 Old Park Lane, Mayfair, London W1K 1QW (By appointment only)
NOXX & CO – Bookkeeping, Accounting & Tax Experts
Protecting Businesses Through Compliance Excellence
