Does anyone know, is there a standard length of time HMRC can go back when carrying out a VAT inspection. I have been contacted by a prospective client (have not decided whether I want him yet!) who has not paid VAT for a number of years. He has now got his returns up to date after receiving a warning, but has not received any demands for payment, so he is expecting an inspection although, in the current climate, he has no idea when. As the majority of his supplies are zero-rated, he does not think he owes a substantial amount.
He is under the impression that they can only go back 4 years, but as accounts have to be kept for 7 years I would have thought this would be more likely.