APP STORES and online booking systems are next on HMRC’s hitlist to gather data enabling them to collect more tax.
In HMRC’s “Tackling the hidden economy: extension of data-gathering powers” consultation document, it sets out plans to target third-party trade facilitators, such as app stores and electronic payment providers, and capture transactional data. The likes of Gumtree, craigslist and Airbnb could be on its radar.
The taxman estimates that the ‘hidden economy’ is responsible for some £5.6bn of missing tax, and increasing its data-gathering powers could recoup a further £860m by 2020/21. Bulk information can be “used as an independent check against the data that taxpayers themselves report to HMRC”.
It also suggests that gathering such data can help it pre-populate tax forms on behalf of customers, which it believes will “reduce error and improve overall compliance”.
The powers, however, would not allow HMRC to require a data-holder to provide data about itself for establishing its own tax position. The data would be used for identifying compliance issues with businesses, and not the transactions of individual customers.
Roy Maugham, tax partner at UHY Hacker Young, said: “HMRC is stepping up its pursuit of tax evaders, and the new powers it is seeking indicate that it believes there is large-scale tax evasion in the ‘app economy’.”
“The digital economy generates huge profits and HMRC clearly believe that they can raise additional revenue by targeting the sector – this is the latest in a long line of aggressive moves by HMRC to boost tax intake.”
The consultation document sets out a number of questions raised by HMRC’s aims, including: what kind of data format would be required and could it be standardised?; How frequently should HMRC request data?; and should HMRC be able to request information from an indirect payment provider?
The consultation ends on 14 October, and can be viewed here.