Compliance, Powers and Appeals

Compliance checks into VAT and other indirect taxes play a pivotal role in safeguarding indirect tax revenues and ensuring fair trade practices.

A compliance check can be carried out in a number of different ways including:

• Requests for information by phone or electronic communication (email etc.)
• On-site inspections (these may be with or without advance notice)

Compliance factsheets on this page offer resources to understand what to do in the event of a compliance check.

On this page you will also find the relevant notices relating to Customs and Immigration powers, your rights of appeal and what to do if you disagree with a Customs and Immigration decision.

Compliance Checks

We carry out checks into returns or other documents to make sure that our customers are paying the right amount of tax at the right time. We call these ‘compliance checks’.

The following factsheets contain important information about when we have started a compliance check:

On-site inspections

As part of a compliance check, we may ask to visit your business premises, if you have any. This is so that we can get a better idea of how the business operates on a day-to-day basis and also enables us to view the assets of the business. We only visit if we think it is necessary and if it will assist us with our check.

VAT

Below are the factsheets relevant to on-site inspections for VAT registered businesses: 

Excise goods

We carry out on-site inspections to examine excise goods and any items linked to those goods or relevant services. We do this to make sure that excise controls and laws are being operated correctly and the right amount of Excise Duty is paid or reclaimed at the right time.

Below are the factsheets relevant to on-site inspections for excise goods businesses:

Electronic Records

Electronic records consist of information or documents that are made or stored on any electronic device or system.

You will receive the following factsheet if we want you to send us some of your electronic records so that we can examine them as part of our compliance check:

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)

The Isle of Man is a leading international business centre renowned for its professionalism and long-standing policy of positive engagement with global standards.

The Isle of Man Government seeks at all times to remain in line with global efforts to combat money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

Find out more about AML/CFT in the Island:

Trade-Based Money Laundering (TBML)

Trade-based money laundering ('TBML') is the process of disguising the proceeds of crime and moving value through the use of trade transactions, rather than financial transactions, in an attempt to legitimise their illicit origins. In practice, this can be achieved through the misrepresentation of the price, quantity or quality of imports or exports. 

Further information on how this might affect business in the Island and what you can do to prevent or detect TBML can be found on the dedicated page:

Sanctions, Export and Trade Controls

All individuals and legal entities who are within or undertake activities within the Island’s territory must comply with the sanctions that are in force. For example, this includes corporate service providers, banks, the insurance sector etc.

Further information on how this might affect business in the Island and what you must do can be found on the following factsheet:

Information Notices

An information notice is a document that legally requires a person to give us certain information and documents to allow us to check their own or another person’s tax position.

Below are the factsheets relevant to information notices and third-party information notices:

Penalties

The following factsheets contain information about penalties:

Civil penalties

This Notice covers excise penalties under the Finance Act 1994, a UK Act which is given legal effect in the Island under the Customs and Excise Act 1993. Although this is a HMRC notice, the procedures are the same, and the equivalent Factsheets can be found on this page. The notices referred to for reviews and appeals and information on seizure and restoration, should be read as the following notices:

What to do if you disagree with a Customs and Immigration decision

This fact sheet tells you what you can do if you do not agree with one of our tax decisions and about appealing to the independent VAT & Duties Tribunal.

This notice explains what you can do if you do not agree with an indirect tax decision. It explains how and when you can ask for a review and how you can appeal to the Tribunal.

What you can do if things are seized by Customs and Immigration

Customs and Immigration will destroy or sell anything it seizes from you for non-compliance of import and export regulations in relation to goods from abroad (i.e. outside of the Isle of Man or United Kingdom), unless you:

• Ask for your things back - you can do this even if you agree customs was right to seize them
• Think customs was wrong to seize your things - you’ll have to go to court

This applies to:

• Goods, cars and other vehicles you bring into the Island
• Any vehicle you use to transport your things
• Packages in the post

This Notice gives important advice and information on what you can do following the seizure of any thing (including vehicles and other goods) by Customs and Immigration. It provides information about whom to contact when you have had things seized from you, and how you can challenge the seizure.

Enquiries into indirect tax matters

This Notice explains what happens during a check into indirect tax matters if we suspect conduct involving dishonesty or deliberate behaviour. Although this is a HMRC notice, the procedures are the same, and the equivalent Factsheets can be found on this page.

Code of Practice - Civil Investigation of Fraud

This Code of Practice covers cases where we suspect serious fraud and we give you the opportunity to disclose fully all irregularities in your tax affairs. The Code of Practice covers indirect taxes including value added tax (VAT), excise and customs duties.

Making a complaint

If you have not been satisfied with our service, and wish to make a complaint, please follow this process:

Further Information

If you have any questions, please contact us:

Email: customs@gov.im

Telephone: +44 1624 648100