What aspect of the business may HMRC officers observe during a control visit?

During a control visit, HMRC officers focus on observing the actual business activity as this is integral to ensuring compliance with tax regulations. They assess how the business operates, which helps them understand the volume of transactions, the nature of the services or goods provided, and the overall accuracy in reporting to HMRC.

Observing business activity allows HMRC to verify that the information claimed in tax returns aligns with the real operations of the business. For example, they may look at sales data, invoicing processes, and general operational practices to ensure that tax obligations are being met correctly.

While employee behavior and physical business security may also be relevant to a business's overall operations, they are not the primary focus of an HMRC control visit. Market competition, on the other hand, is generally outside the scope of the HMRC's investigation as it pertains more to economic analysis rather than tax compliance. Thus, business activity is the most pertinent aspect observed during these visits.