Finance Act 2013: HMRC Granted New Powers to Tackle Tax Evasion
HMRC’s new powers were introduced under the Finance Act 2013, which made amendments to schedule 23 of the Finance Act 2011. The Finance Act 2013 came into force on 1 September 2013.
Under the new rules information on card payments to UK firms and traders will be made available to HMRC for the first time. This has been achieved by adding ‘merchant acquirers’ as a category of data-holders under schedule 23 of the Finance Act 2011. This allows HMRC to issue a notice to companies that process card payments requiring them to provide data of card payments on specific businesses and traders.
HMRC’s Crackdown on Tax Evasion
The Government has given HMRC nearly £1 billion to tackle tax fraud and tax evasion. The shake-up means HMRC can now access valuable data about specific businesses which include restaurants, cafes, shops, garages, hotels (ie businesses that usually deal with cash or card instead of bank transfers). HMRC estimate that accessing this information could reduce tax fraud and tax evasion by over £50 million per year.
Exchequer Secretary to the Treasury, David Gauke stated the following:
“Tax evasion costs taxpayers £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.”