HM Revenue and Customs doesn’t hide their light under a bushel when it comes to encouraging people to pay the taxes they’re due. In recent times, more than ever, it is evident that the UK government and HMRC are working together in a highly focused way to help close the deficit by recovering unpaid taxes. This combined effort has led to much more sophisticated investigations that have resulted in penalty regimes that appear to be leaving no stone unturned.
HMRC publicly state that they run campaigns on a regular basis to:
- Help people be compliant and self correct if they suspect they haven’t declared everything they should have done;
- Provide opportunities and encourage people to become compliant, no matter their circumstances and
- Inform their customers that they may well be one of the target sectors being pursued by HMRC.
In their public statements, HMRC claims that these actions allow people to get their tax affairs into order prior to facing investigation or questioning. Each campaign they run appears to be a three pronged attack whereby:
1. They gather pre-campaign information, which provides the target and the basis for the message of the campaign;
2. They create the campaign, which diffuses their message and gives them the opportunity to gather valuable information.
3. They conduct follow up remedial work.
This focused approach to high risk sectors allows HMRC to home in on individuals and, or businesses who choose not to get their tax affairs right.
In a recent campaign, HMRC were granted the right to access information regarding credit and debit card payments. While they have no right to look into the people sending these payments, they will be able to gather valuable insight into the number and the value of transactions that business owners have carried out. Openly aiming to drill down into the affairs of business owners, this campaign gives HMRC even more powers to look into the accuracy of business owners’ returns, without the business owner’s knowledge.
Granted these new rights by the Finance Act 2013, HMRC’s new powers came into force on 1st September and will require organisations who process credit and debit card payments to provide them with data on payments made to specific businesses. It is likely that businesses such as restaurants, cafes, shops garages and hotels are likely to be those first affected, due to the proportionately high number of credit and debit card payments they transact.
There is no getting away from the fact that this recent development is further evidence that the government and HMRC are particularly serious about sniffing out tax evaders and ensuring they stand up and are counted, or face the consequences.
If you’re a business owner that processes significant numbers of credit or debit card payments in your business bookkeeping and would be interested in finding out more about how you or your business might be affected by this change, why not get in touch?