HM Revenue & Customs (HMRC) has launched a consultation on changes to its data-gathering abilities in order to tackle the “hidden economy.”
Members of the UK200Group have commented on news that HM Revenue & Customs (HMRC) has launched a consultation on changes to its data-gathering abilities in order to tackle the ‘hidden economy’. HMRC believes that an extension in the types of third party data it has access to will aid it in tackling the £5.9 billion tax gap created by businesses who fail to register for tax and individuals who fail to declare a source of income. In 2013, the government body was given powers to collect data from merchant acquirers to help identify traders receiving income but not registered for tax and those who are registered but under-declare their income. HMRC wants to extend this access to two similar sorts of data; information held by electronic payment providers, as well as business intermediaries that allow customers to make orders, purchases or reservations relating to goods, services or digital content.
Jonathan Russell, Partner at UK200Group member firm ReesRussell:
“Many would say it’s about time HMRC targeted the people who are trading but not paying taxes but is more data the best way forward? HMRC does not have the best of records in using the data it has. They almost certainly have significant information which would enable them to identify many of the Buy to Let landlords who are either under declaring of not declaring their rental income. Many genuine traders would welcome a clamp down on the unregistered traders mostly selling via eBay and Facebook who are often undercutting their prices. I would suggest that a better route would be to examine people who have trade accounts with wholesalers or attendees at things such as the NEC Spring Fair and ensuring that they are registered as businesses with HMRC.”
David Whiscombe, Director of Tax at UK200Group member firm BKL:
“I have no problem with HMRC collecting data provided it is used responsibly and openly. I am thinking of a case where HMRC undertook a lengthy and expensive enquiry on the basis of information allegedly held only to close it down eventually when they were forced to admit that the information held was either incorrect or non-existent. There should be a sanction against HMRC for such abuse.”
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Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and lawyer firms throughout the UK totalling over 550 partners, 150,000 business clients and global links in over 50 countries. UK200Group provide services and products that are designed to enhance the business performance of its members. Telephone 01252 401050, email admin@uk200group.co.uk or visit www.uk200group.co.uk.
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