Summer 2009 Newsletter Content Pot and kettle No more stealth Pensions hit A place in the sun Ready or not... Nice motor Making allowances Good times, bad times Tax-free checkup Three square meals Funny question Dividend rules OK? Too good to be true? Pay my friend Early EIS Mind the halfpennies Just the ticket Flat rate changes Foreign Service This year, next year Partial exemption Penalties Compliance checks Under their eye Howzat? Know your rights Discipline Don't be mean Redundancy Two sorts of absence Warranties

Compliance checks Since 6 April 2009 the taxman has had new powers to carry out checks on taxpayers' records. This is part of the long running marriage of Customs & Excise with the Inland Revenue: traditionally, Customs officers - who dealt with VAT but were also responsible for the prevention of smuggling - had far greater powers to visit and inspect businesses than their income tax and corporation tax counterparts. The new rules appear to give more power to the taxmen rather than reducing the authority of the VATmen. They have the right to visit the place where a business is carried on and ask to see the records. However, if that is your home, you don't have to let them in. They are supposed to tell you in advance, unless they can show a senior officer a pressing need to make an unannounced visit - and if you don't want them in your house, you can offer to meet them somewhere else, for example at their offices or at your advisers' premises. HMR&C can also issue demands for information. If what they want is part of the records that you are required by law to keep to back up your tax or VAT returns, you can't refuse to provide it, unless you can give a reasonable excuse ("the dog has eaten the books"). Even then you have to say what you will do to recreate the information. New powers for the taxmen are worrying, and in spite of reassurances many people wonder whether even they will know what their new powers are. They can also ask you to give them things that they have no power to demand - if you agree, you may dig yourself into a hole. You may think you should co-operate because you have nothing to hide, but your attempts to be helpful may make a tax officer suspicious about things that are entirely innocent. We don't want to be alarmist, but at the very least, any enquiry or request for information from HMR&C must be taken very seriously. We recommend that you take advice before answering, and consider having an adviser present if you receive a visit. You may need someone on your side.