HMRC new powers to access businesses credit card records

Tax Comments Off on HMRC new powers to access businesses credit card records

The Finance Act 2013 has provided HMRC with a new weapon to combat tax evasion. As of 1st September, HMRC have been legally entitled to have access to merchant acquirer data. They will be able to see information on businesses credit and debit card payments to attempt to reduce fraud.

The Revenue suggests that its new powers could reduce fraud by more than £50m per year. Businesses are warned that all payments made to UK businesses via credit or debit card payments can be viewed by HMRC.

Campaigners say the new system raises data protection fears as it could be open to errors, given HMRC’s poor track record.

‘No personal data identifying the card owners or card numbers will be obtained, but this data will be used to ensure that traders have correctly accounted for all taxes due’ HMRC said.

Exchequer secretary to the Treasury David Gauke, said: “Tax evasion and the hidden economy cost the taxpayer £9bn a year.”

Nearly £1bn has been given to HMRC from the government to help tackle fraud and evasion. These new powers give HMRC the chance to try and reduce any opportunities that may arise for those who try and cheat the system.

The legislation allows HMRC to obtain data for the previous four years. HMRC will be analysed using its Connect computer system, which is able to identify possible fraud and tax evasion.

If evidence suggests that a trader is not registered with HMRC, or is declaring less of their income, then HMRC will contact the trader. In extreme cases this may result in prosecution, but a more usual outcome will be a large bill for unpaid tax, interest and penalties.

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