A new crackdown on tax evasion will make information on all credit and debit card payments to UK businesses available to HM Revenue and Customs for the first time.
new powers, HMRC can now access information from the UK’s merchant acquirers – the
companies that process card payment transactions – to find out the number and
value of transactions completed by a specific trader.
No personal data identifying the card owners or card numbers will be obtained, but the data will be used to ensure that traders have correctly accounted for all taxes due.
Announced in the same week as it launches a tax evasion advertising campaign, HMRC estimates that this information could reduce fraud by over £50 million per annum.
Exchequer Secretary to the Treasury David Gauke said: “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.
“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.”
The legislation 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 merchant acquirers this week and from next year this will be an annual request.
The Revenue will analyse the data using Connect, its risking system, which will cross-reference and compare the data with what the tax authority already holds, allowing tax officials to detect evasion and fraud.