Improving Data Quality for Tax Compliance: A New Consultation from HMRC
HM Revenue and Customs (HMRC) has launched a technical consultation aimed at enhancing the quality and consistency of data it receives regarding interest income and card sales. This initiative is crucial for ensuring that taxpayers can accurately report their income and comply with tax regulations. The consultation is open until 11:59 PM on 20 August 2026, inviting feedback from various stakeholders, including banks, building societies, and payment service providers.
The proposed changes focus on how HMRC collects and processes data related to interest income—such as that from banks and building societies—and card sales, which are reported by merchant acquirers. By improving data accuracy, HMRC aims to assist taxpayers in getting their tax obligations right the first time, thereby reducing errors and enhancing compliance through targeted interventions.
Key Details of the Consultation
The consultation outlines several significant proposals, including:
- Draft secondary legislation under Schedule 23 of the Finance Act 2026.
- A new data schema for reporting interest income and card sales, set to replace the existing BBSI and OI data schemas.
- Guidance for data holders on due diligence and notification processes to HMRC.
From April 2028, organisations that fall under the scope of this legislation will be required to:
- Continuously provide data to HMRC without needing a specific notice.
- Report data at regular intervals and adhere to strict submission deadlines.
- Collect and verify specific tax references from customers before reporting.
- Make reasonable efforts to obtain any missing data required for compliance.
- Register with HMRC prior to reporting.
This new measure is set to take effect on 6 April 2028, marking a significant shift in how financial institutions and payment facilitators will interact with HMRC regarding data reporting.
What This Means for UK Businesses
For UK businesses, particularly those in the financial sector, these changes will necessitate adjustments in data collection and reporting practices. Companies will need to ensure they have robust systems in place to gather and verify customer information accurately. This will not only help in meeting compliance requirements but also in reducing the risk of penalties associated with incorrect reporting.
Additionally, businesses should prepare for the operational implications of these new reporting obligations, which may involve investing in technology or training staff to handle the updated processes effectively. Understanding these requirements will be essential for maintaining compliance and ensuring smooth interactions with HMRC.
Summary
The HMRC consultation on improving data quality for interest income and card sales is a vital step towards enhancing tax compliance in the UK. With new reporting requirements set to come into force in 2028, it is crucial for affected organisations to engage with this consultation and prepare for the changes ahead. Stay informed with the latest UK tax, accounting, payroll, VAT, HMRC, Companies House and business news from NPUS.
Need Professional Advice? If you are interested to learn more, feel free to contact us on the below to ensure you are complying today.
Telephone: 0203 4688 788
