IPTM7240 - Audit of insurers: the inspection visit

Before the inspection

LB Audit will issue a formal audit notice. This will be preceded by a call or meeting with the insurer to discuss the details of the audit and what will be required. The auditors will also outline the areas the review will cover and discuss any issues the insurer may have concerning the visit.

The inspection

Auditors will carry out the inspection in accordance with the audit scope, designed to ensure that the insurers are operating the chargeable event rules correctly. This will be a combination of data testing and on-site inspections. Records must be made available for testing within the UK, whether on-site, via digital methods, or through an offshore insurer’s UK tax representative.

The insurer must show auditors certain records to demonstrate that they have operated the chargeable event reporting regime effectively. The records that should be maintained and made available are described at IPTM7250.

At the close of the inspection the auditors will discuss their findings with the relevant members of staff. There may be some particular issues which arise out of an inspection or which are of special concern to a particular insurer. LB Audit will explain their approach on any issue as and when it arises.

After the inspection

Auditors will complete a report of their findings, which will be shared with the insurer and their HMRC Customer Compliance Manager (if applicable). If, on the basis of the inspection results and other information available, auditors are satisfied that events have been correctly recognised and reported by the insurer, they will advise the insurer that no further action is needed.

If the auditors find that the rules have been breached they will ask the insurer to take corrective action and there may be liability to a penalty - see IPTM7245.