DATA PAYMENT CRACKDOWN
September 12 2013.


A new crackdown on tax evasion will, for the first time, make information on all credit and debit card payments to UK businesses available to HMRC.

Under 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 this data will be used to ensure that traders have correctly accounted for all taxes due - levelling the playing field for all businesses.

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 legislation allows HMRC to obtain data on card payments to all UK businesses for the previous four years. HMRC will analyse the data using its sophisticated risking system, Connect. This cross-references and compares the data with what the tax authority already holds. The process will allow HMRC to identify fraud and evasion. HMRC has worked closely with international tax authorities - many of which have already had great success in reducing evasion, through access to such data.

Legislation was introduced in the Finance Act 2013 allowing HMRC access to merchant acquirer data. The legislation came into effect on 1 September 2013.