Finance bill briefing: Clause 252 and Schedule 22 – Data-gathering
Clause 252 and Schedule 22 enable HMRC to obtain data from third-party data holders on an ongoing basis. Our briefing highlights the need for safeguards and appropriate processes for challenging and correcting data.
This legislation is the culmination of various consultations on the use of improved third-party data. We think that smarter use of third-party data has the potential to improve the taxpayer experience with HMRC, and we support the principle of using third-party data to that end. However, there need to be appropriate safeguards in place, transparency around the data and robust processes for taxpayers to challenge any defects or errors.
This legislation gives HMRC the power to impose a standing obligation on certain third-party data holders to provide data to HMRC on an ongoing basis. This differs from the existing provisions in section 86 and Schedule 23 of Finance Act 2011, under which HMRC have the power to request data from data holders on an ad hoc basis. We understand that the legislation will initially apply to bank and building society account information, as well as card sales data.
We use our briefing to call for safeguards for individuals who are not eligible for a National Insurance number and those who need time to obtain a National Insurance number.
We welcome the inclusion of a regulation-making power to require the provision of a copy of data supplied to HMRC to the person to whom the data relates.
We note that there will inevitably be occasions when third-party data provided to HMRC is incorrect. So, taxpayers need clear HMRC-supported mechanism to challenge and correct third-party data.