HMRC to have new powers to look at credit/debit card data

4 September 2013

New powers have been granted to HMRC from the 2013 Finance Act which comes into force this week for them to look at the number of credit/debit card transactions that go through a company.  This will be achieved by them going through the merchant provider. The data they will be available to glean will be the total value and number of transactions although they have confirmed that they will not be able identify individuals so privacy concerns should be alleviated. HMRC will analyse the data using a risking system.  This means they will cross-reference the data with that already held by the tax authority. The first requests for the data will be sent to merchant acquirers this week but from next year this will be an annual request.David Gauke, exchequer secretary to the Treasury, 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.” Exactly how this will really help HMRC is open to question, as the money taken from credit card merchants providers are placed directly into the business account.  They have the power to take money out if a transaction is voided so it is unlikely they would countenance the money being sent to a non business account or one that is not connected to the company.  What is more, HMRC have the power to ask businesses for all their bank statements. We suspect that this may be a scare tactic to discourage bad practice.