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Data payment crackdown

03 September 2013 10:03

HM Revenue & Customs

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 (HMRC) for the first time.

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 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.

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, from access to such data.

This week HMRC is launching the second stage of an evasion publicity campaign, through a series of targeted advertisements including radio advertising and over 3,000 billboards in public areas. The campaign works alongside existing compliance activity such as data collection, Taskforces and enforcement to raise awareness among those breaking the rules that HMRC is closing in on undeclared income.

Notes for Editors

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

2. The Evasion Publicity campaign first aired from November 2012 to February 2013. This second burst runs from the 2 September to 4 October. Further information is available here.

3. Follow HMRC on Twitter @HMRCgovuk

4. HMRC’s flickr channel www.flickr.com/hmrcgovuk

Issued by HMRC Press Office
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