Tucked away in the back pages of this year’s budget was a new information power for HMRC. It will now be able to issue formal information notices to “card payment processors”, in order to get bulk data about businesses accepting credit cards; debit cards; and charge cards. And the taxman will be able to go to the card payment processors and force them to reveal information about the card sales made by retailers. Her Majesty’s Revenue and Customs will then compare that to sales data to the business accounts and VAT returns.
Information that will have to be provided includes: the retailer’s name; address; bank account details and VAT number (where known). There will be a safeguard to ensure that the identities of the card holders are not supplied. HMRC are just interested in the total sales made by a particular business in each month.
This is the latest in an ongoing series of extensions to HMRC’s already wide ranging information gathering powers. HMRC has also invested heavily in sophisticated computer software, which enables them to interrogate this data and then match it up with the returns sent in by traders. The software produces detailed risk analyses and enables the taxman to focus on those areas where there are apparent discrepancies.
What does this mean for me?
If you are in business and accept payment by card, then HMRC will soon have the details of the amounts paid to you by the credit card processor. It is imperative that you record all of your sales properly; including any refunds or disputed items. If HMRC think they have found an anomaly, then your records should enable you to quickly prove that you have been returning full sales and bring a speedy end to any compliance check.
How can Lynam Tax Enquiry Experts help me?
If you are undergoing a tax investigation or a compliance check then specialist help from Lynam Tax Enquiry Experts could save your blushes and your business. Plus, our massive experience will almost certainly save you tax and penalties as well.
*For a free, confidential chat about your tax affairs, don’t delay, call Paul Lynam now: 0845 643 9997
or Andrew Nutbrown: 07718 778710