Now HMRC can access debit and credit card payment data to catch tax evaders
You’ve got to feel a bit sorry for HMRC. Incomes are stagnant or falling, more people are out of work (including fewer HMRC officers) and still they are expected to keep grinding more tax out of people to prop up the Treasury coffers.
The latest bright idea is to marry up debit and credit card data with declared income and profits to catch out traders who omit to disclose all their profits. New powers bequeathed by Government allow HMRC to request access to this data from the UK’s ‘merchant acquirers’, which will give them the value and number of transactions made in favour of any specific trader. This data can then be tied into information reported on tax forms.
So far sounds disturbingly like common sense. The legislation, which took effect on 1 September, allows HMRC to obtain data on card payments to all UK businesses for the previous four years. The first requests for the data will be sent to card companies this week and from next year this will be an annual request.
HMRC say this will “level the playing field” for all businesses and they estimate this could reduce fraud by £50 million per annum.
Whether this does prove such a valuable tool in business remains to be seen- perhaps many evasion-inclined businesses would try and overlook cash payments rather than third-party recorded card payments. However, what would be more scary is if these powers were extended to look at personal purchase histories- the situation where the Revenue are able to call you up and ask you just how you can afford to pre-order a PS4 while on JSA may not be far away…