HMRC given power to obtain payment card transaction data
The Finance Act 2013, which came into force on 1 September, has given HMRC new powers to gather data stored by merchant acquirers, typically banks, in a move it said would further clampdown on tax evasion.
Under the changes, companies that retailers use to facilitate payment card transactions will be required to hold onto data about those transactions for a minimum of four years.
HMRC will analyse the data using its own sophisticated risking system, which will cross-reference and compare data with what the tax authority already holds.
Any irregularities found will then be used as a basis for investigation into possible tax evasion.
HMRC intends to send out its first requests for data this week and going forward will make further requests on an annual basis.
With the introduction of these new rules, it is more important than ever that all freelancers receive clear and accurate advice on how to operate their limited companies in an efficient and tax compliant way.