HMRC spreads its tentacles
HMRC is now able to access banking records to gather information on credit and debit card payments made to UK businesses. New legislation came into effect in September 2013 that allows HMRC to compare the number and value of transactions completed by a specific business on credit and debit cards to declared sales figures. The new powers are expected to reduce fraud by over £50 million per year.
The new powers do not allow HMRC to access personal data identifying the card owners or card numbers. The data will be used to ensure that businesses have correctly accounted for all taxes due, for example by comparing credit and debit card sales to the figures quoted on a VAT return. HMRC will be using its computerised risk assessment system, Connect to cross-reference and compare the data to help identify tax fraud or evasion. The Connect system draws together information from a variety of data sources and displays it in an easy to understand format on one screen. It was designed by BAE Systems and has been in use since 2010.
Commenting recently on the new powers, the Exchequer Secretary to the Treasury David Gauke said:
‘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.’