HMRC accesses business card payment data

Tuesday 3 September 2013

HMRC has upped the ante again in its quest to fight tax evasion, after it was granted new powers to access data on card payments made to UK businesses.

As part of its crackdown on undeclared income, the tax authority has been given the power to request information pertaining to all credit and debit card payments made to businesses in the UK. HMRC insists that no personal data, such as cardholder information or card numbers, will be collected, but it will be able to acquire information relating to the number and value of transactions completed by any individual trader - including sole traders and limited company contractors.

The powers were announced by chancellor George Osborne during this year’s Budget in March, but only came into effect on Sunday (September 1st). This means the first data requests are being sent to the merchants who process card payments this week; from the beginning of next year, the requests will be made on an annual basis. Under the new legislation, information reaching back over the past four years can be obtained.

When HMRC receives the data it will be run through the tax authority’s own risking system to compare it with the information already held in official files. Where there are incongruities, HMRC says it will be able to use the findings to root out cases of fraud and tax evasion. Officials say that the government has worked alongside authorities around the world to develop the initiative, since many other states have had considerable success in using credit and debit card data to reclaim unpaid tax and punish evaders.

“Tax evasion and the hidden economy cost the taxpayer £9 billion a year. While the majority of traders are honest, they may find themselves undercut by the minority who seek to lower prices by cheating the tax system,” said David Gauke, exchequer secretary to the Treasury.

“The government has given HMRC nearly £1 billion to tackle fraud and evasion, and these new powers give HMRC an extra tool to ensure a level playing field between businesses, and also reducing opportunities for those who try and cheat the system.”

Identifying sources of undeclared income is a crucial part of the fight against tax evasion for HMRC. At the same time as these new powers were being introduced, the government unleashed the second wave of a large-scale media campaign designed to raise awareness of its current crackdown on tax evaders.

Following a first run between November 2012 and February of this year, the publicity drive will last until the start of October, warning those who have not declared all of their income that HMRC is closing in on them. The campaign, which involves radio advertising, over 3,000 separate billboards and other media, also encourages evaders to come forward and pay their outstanding tax in order to avoid the consequences of being caught by the taxman.

As well as the large boost to its budget, the tax authority has also benefited from extra staff to increase the number of investigations and prosecutions it can deal with at a time.


By Victoria McDonnell

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