The taxman has gained greater powers to clampdown on retail tax evasion following the launch of new rules which require banks to keep hold of debit card transactions for up to four years.
HM Revenue & Customs (HMRC) had existing powers to obtain four years’ worth of “relevant data” held by employers and land owners to assess whether they were paying the correct amount of tax.
Now the data gathering powers have been extended to banks.
“HMRC will analyse the data using its sophisticated risking system, Connect,” it said. “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.”
HMRC said that it would not obtain card numbers or any other personal data on card owners under the new framework. It said it would send out its first requests for data this week.
“Tax evasion and the hidden economy cost the taxpayer £9bn a year,” Exchequer Secretary to the Treasury David Gauke said. “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.”
