Transaction & Goods Checks

HMRC may review transactions and the movement of goods to understand whether tax returns, VAT returns, repayment claims and business records are accurate. Businesses should be able to explain transactions clearly and support them with records.

This page helps businesses understand the types of records that may be relevant when HMRC reviews transactions, supply chains, imports, exports, deliveries and stock movements.

Key Points

• Maintain accurate transaction records.
• Keep supplier and customer documentation.
• Retain delivery and transport evidence.
• Keep stock movement records where relevant.
• Retain import and export documentation.
• Ensure records support the VAT treatment applied.

Transaction records
Supplier and customer evidence
Goods movement records
Imports and exports
Stock records
Supporting VAT treatment

Transaction Records

Accurate transaction records help businesses demonstrate how purchases, sales and other commercial activities have been conducted. These records may include invoices, contracts, purchase orders, payment records and accounting entries that support the information reported to HMRC.

Supplier and Customer Evidence

HMRC may expect businesses to retain evidence relating to suppliers and customers, particularly where due diligence or compliance concerns arise. This can include business verification checks, trading history, contact details and documents that support the legitimacy of commercial relationships.

Goods Movement Records

Where goods are bought, sold, imported or exported, records showing the movement of goods can be important. Shipping documents, delivery notes, transport records and warehouse information may help demonstrate that transactions took place as described and support the tax treatment applied.

Imports and Exports

Businesses involved in international trade should maintain records relating to customs declarations, import documentation, export evidence and other supporting materials. These documents can help demonstrate compliance with customs requirements and support VAT treatments associated with cross-border transactions.

Stock Records

Stock records provide evidence of goods held, purchased, sold or transferred by a business. Maintaining accurate stock information can help support accounting records, explain trading activity and provide evidence where HMRC seeks to understand the movement of goods through a business.

Supporting VAT Treatment

Businesses should retain evidence supporting the VAT treatment applied to transactions, including standard-rated, reduced-rated, zero-rated or exempt supplies. Appropriate documentation can help demonstrate why a particular VAT treatment was adopted and support the position taken if HMRC raises questions during a compliance check.