HMRC could demand customer information from small businesses
HMRC is seeking additional powers to force businesses to provide extra information on their clients and customers, according to a leading accountancy group.
UHY Hacker Young says that currently HMRC largely restricts its requests for information on taxpayers to banks and estate agents, however it now wants the right to be able to routinely ask all companies for data on their trading partners. For example, companies could be asked to provide details on their suppliers so that HMRC can pursue those suppliers that it believes are not paying the right amount of VAT.
Last week, HMRC won a Court order to force over 300 financial institutions to reveal details of customers with offshore accounts. This being just the latest step in a long line of Government initiatives to give HMRC potentially draconian police like powers.
In its new consultation paper, HMRC proposes that banks and other data providers could also be asked to verify the identities of taxpayers, even where they would not collect this data for their own commercial purposes. For example companies could be asked to match national insurance numbers of customers with the date of birth of customers.
HMRC keen to boost tax revenue
Roy Maugham, Tax Partner at UHY Hacker Young commented:
"These measures are going to place an expensive red-tape burden on organisations at a time when businesses are desperately looking to control costs.
“To comply with the new HMRC demands businesses may have to invest in expensive data storage and protection technology.
“With these extended powers HMRC will be able to build a database of unprecedented size and power about UK citizens and businesses. This means that it will be able to cross-check the bank details of potentially everyone against their tax returns in just a few clicks.
“HMRC has used its bulk information powers before to tackle non-compliance in areas such as undisclosed income in offshore bank accounts and buy-to-let property. With the soaring public debt, HMRC will be very keen to boost tax revenue, so we could see much more of these targeted compliance campaigns line up in the near future.”
Posted September 8, 2009
