HMRC investigates small firms’ card records
HM Revenue & Customs (HMRC) is monitoring credit card records in a £100m crackdown on small firms it suspects are failing to declare payments.
The Revenue has revealed that it is studying the number of card payments recorded by companies including newsagents, restaurants and garages to see if they match up with the profits that they declare on their tax return.
It estimates around 30% of sales made at most small businesses are paid for in cash, and that many companies may not be declaring all of these payments on their returns.
If HMRC finds that a firm has recorded 90% of its transactions as card payments, it could raise a red flag and trigger further investigations.
Chas Roy-Chowdhury, of the Association of Chartered Certified Accountants, said: “This Big Brother approach is concerning.
“HMRC has made it clear it is not 100% sure how good its data is. The taxman needs to be sure business owners don’t end up being wrongly vilified.”
