The taxman is to use ‘big brother’ technology to catch small businesses dodging their taxes.
Revenue & Customs will investigate the credit and debit card sales records of restaurants, clubs and other small businesses and compare the data with VAT returns, looking for signs that the companies are not declaring all of their takings.
The crackdown is expected to start by analysing figures for Christmas and the New Year using the Revenue’s Connect computer system to trawl for irregularities and inconsistencies.
The Connect system has been in place for three years, but gaining access to banking records showing card transactions is a new power granted to tax investigators under the Finance Act 2013, which became law just three months ago.
Revenue & Customs estimates the change could help to cut tax and VAT evasion by £50million a year.