Press reports have suggested that HM
Revenue & Customs (the new Department formed from the amalgamation of
the Inland Revenue with Customs & Excise) are asking larger businesses
to provide permanent remote access to their accounting systems.
This has, of course, raised many
issues, not least that of data security. Additionally, it provides
HMRC with much more time to identify possible accounting errors.
However, as one VAT Specialist, in a
well-known plc commented to me, ‘they may not pick up where an
error has already been adjusted.’
This will lead to time-consuming work
for in-house accounts staff, in proving to HMRC that adjustments have
There are also legal issues; does the
VAT Act 1994 actually grant the Department this sort of unfettered
access? Perhaps we will have to wait for a test case on this issue.
(Original article in Accountancy Age
10 Mar 2005)