CIOT Warns of Tax Trawl on Digital Economy
The Chartered Institute of Taxation (CIOT) has warned taxpayers that HM Revenue and Customs (HMRC) have now published the responses to their consultation on proposed extensions to their data-gathering powers, which target 'digital platforms'. HMRC have voiced concerns that there is significant avoidance of both VAT and taxes on profits.
The proposed powers will extend access to two similar sorts of data to help tackle the 'hidden economy'. The changes would apply to data held by:
- businesses that perform a similar function to merchant acquirers by handling monetary transactions, but not necessarily in relation to credit and debit cards (increasingly these transactions are online and take different digital forms); and
- business intermediaries – these businesses can take many forms, for example allowing customers to make orders, purchases or reservations relating to goods, services or digital content.
The practical implications for businesses using online ordering and payment systems, as well as the more obvious targets such as eBay users, are potentially considerable.
For more information, see the GOV.UK website.