HMRC’s power to request data

By Tolley
HMRC’s power to request data

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • HMRC’s power to request data
  • Introduction
  • Outline
  • Relevant data, relevant data-holders and data-holder notices
  • Time limits
  • Penalties
  • Grounds for appeal against the data-holder notice

Introduction

HMRC collects taxes needed to fund and deliver central Government spending. With the extra investment in HMRC compliance activity since 2010, HMRC is tasked with raising higher additional revenue by tackling tax avoidance and tax evasion.

A series of initiatives have been launched since 2010 to achieve the revenue target, including campaigns and task force activity but HMRC has also been given extra help in the form of increased legislative powers to collect data.

FA 2011, Sch 23, Part 1, para 1

For background information on the introduction of the data-gathering powers, see Simon’s Taxes A6.325.

The data collected feeds into the analysis work conducted by the HMRC Risk and Intelligence Service and is thought to play a prominent role in determining which campaigns are going to be launched and which business sectors are going to be targeted for task force activity.

Since introduction, the data-gathering powers have been extended on a number of occasions to include:

  • merchant acquirers ― businesses that process credit and debit card payments for merchants and retailers
  • business intermediaries ― this includes booking and reservation companies such as those that take payment for hotel and holiday accommodation, restaurants supplying take-away food and outlets reselling tickets for music concerts and theatre productions
  • electronic payment service providers ― businesses that facilitate different ways of paying, such as digital wallets, which can be used in conjunction with mobile payment systems to allow individuals to make purchases with their smartphones
  • money service businesses ― entities that provide money transmission, cheque cashing or currency exchange services, but are not excluded credit institutions. The definition of money service businesses covers high street money transmitters (and their agents), foreign exchange currency traders, peer-to-peer money transmitters, and any other enterprise that offer these services in addition to its main line of business

More on HMRC powers in relation to compliance checks: