Tax Evasion – Access to credit & debit card payments

As part of HMRC’s crack down on tax evasion, new powers have meant they can now access information from the UK’s merchant banks 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 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.”

This 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.

This process will allow HMRC to identify fraud and tax evasion as part of their on-going exercise to close in on undeclared income.

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

If you are unsure how this affects you or have any questions, get in touch with our Tax team or call 0161 249 5040 to find out more.