CUSTOMS: seeks to reduce burden on those that toe the line

Some 100 law firms in the north of England will be approached by HM Customs & Excise (C&E) next week to take part in a VAT self-auditing pilot aimed at providing more flexibility and educating them about the inspection process.

Firms that agree to participate will be invited to complete a short questionnaire featuring questions similar to those asked during routine audits; C&E will provide guidance on how to conduct the audit.

Firms finding errors of more than 2,000 in their accounts will submit a voluntary disclosure or, in the case of smaller errors, amend their next VAT return.

By signing a self-audit declaration, firms will be exempt from the next round of VAT audits.

C&E hopes self-auditing will free government resources to target the least compliant businesses and reduce the burdens on firms that try to toe the line, while at the same time giving the taxpayer value for money.

C&E spokesman Matthew King said it planned to roll out the scheme if it proved to be an attractive alternative to the traditional 'routine visit'.

He explained: 'The legal sector is regarded as compliant overall, but we have a duty of care to ensure all taxpayers are accounting for VAT correctly, and this trial represents a cost-effective means of gaining assurance and providing education for the business.'

Paula Rohan