HMRC have issued a reminder of the powers available to them under the above legislation including how and why HMRC use this data to check the monthly income of businesses.

There are eight major Merchant Acquirer businesses operating in the UK. HMRC has now received the first sets of data from the Merchant Acquirers providing monthly credit and debit card income from UK businesses.

HMRC analyses the data using its risking system, Connect. This cross-references and compares the data with the information HMRC already holds to match the information against taxpayer records in order to identify those who fail to report, or deliberately under-report, their business income. The data is also being used to increase understanding of the behaviours and compliance profile of businesses that receive credit and debit card income and improve fraud detection.

The new powers came into operation on 1 September last year and the legislation allows HMRC to obtain data on card payments to all UK businesses for the previous four years.

Similar legislation is in place in Ireland with the first information returns due to the Revenue Commissioners on 30 April last year.