HMRC’s crackdown on card payments
Tuesday, 07 August 2018
HM Revenue & Customs (HMRC) are sequentially targeting different sectors of the economy as they look for new sources of revenue.
HMRC have been targeting restaurant and takeaway businesses as they believe they are more likely than most to under-declare income.
Businesses in this sector make up 19% *(25 of 133) of all the businesses and business owners ‘named and shamed’ by HMRC as ‘deliberate tax defaulters’ in December 2017. The businesses named by HMRC are already facing an investigation.
The sector is now facing more stringent checks than ever before and as a result, many businesses could be at risk from an investigation. HMRC are collecting data directly from payment terminals and cross-referencing the information with its existing records to check that payments match declared income.
The monitoring of electronic payments is a tactic that can be used across many other sectors of the economy and for any business that accepts card payments. This means that whichever sector HMRC target next is also likely to be subject to these automated checks.
Another sector recently targeted by HMRC is internet retailers. As part of this crackdown, HMRC launched investigations into more than 2,500** retailers they suspected of not paying the right amount of VAT on goods they import. Other sectors targeted in the past include: solicitors, medical practices and buy-to-let landlords, showing just how broad HMRC’s focus can be.
With HMRC under pressure from HM Treasury to increase their revenue, it’s yet to be seen which sector they will target next.
Investigations can be costly, disruptive and stressful and may result in long-term reputational damage. You can protect yourself against the cost of most tax investigations by subscribing to Larking Gowen’s Tax Fee Protection Service. To find out more, call 0330 024 0888 or email firstname.lastname@example.org.