The introduction of new anti-tax evasion credit and debit card payment powers has increased the necessity for companies to ensure their books are in order, according to DSH Chartered Accountants & Business Advisors.
Under new legislation, HM Revenue & Customs (HMRC) is able to gain access to a specific trader’s complete card transactions for the previous four years, including the number and value of these payments. No personal data identifying the card owners or card numbers will be obtained.
The data will be used by HMRC to ensure that businesses have correctly accounted for all taxes due. HMRC estimates that by using this resource they can reduce fraud and tax evasion by more than £50 million per year.
Stephen Metcalf, Tax Manager at DSH, based in Maidstone, said: “This new power gives HMRC the ability to weed out those traders who try and cheat the system through fraud and evasion.
“We would encourage any traders who are concerned that their affairs may not be completely regularised to contact us so we can ensure their books are in order. It is always better to approach HMRC first, rather than wait for them to find any problems, as potential penalties are mitigated by co-operation.”
The first requests for the data will be sent to merchant acquirers – the companies that process card payment transactions – this week and, from next year, this will be an annual request.
HMRC will analyse the data using its sophisticated risking system, Connect, which cross-references and compares the information with what the tax authority already holds.
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. These new powers give HMRC an extra tool to ensure a level playing field between businesses, and reduce opportunities for those who try and cheat the system.”
To find out more about DSH Chartered Accountants & Business Advisors, visit www.dsh.co.uk or call 01622 690666.