- At Spring Statement 2025, the government launched a consultation entitled Better use of new and improved third-party data, seeking views on modernising how HMRC acquire and use third-party data to make it easier for taxpayers to get tax right first time. This will be of particular interest to institutions currently subject to Bank and Building Society Interest (BBSI) and Other Income (OI) reporting, as well as providers of card acquiring services.
- This latest consultation builds on the Office of Tax Simplification’s 2021 report Making better use of third party data, the 2023 call for evidence entitled Tax Administration Framework Review: information and data and the 2024 ‘Crypto-asset Reporting Framework’ consultation.
- The latest consultation outlines policy options for how HMRC can reform legislation to receive the right data, of the right quality, at the right time. In particular, it sets out the government’s plans for a phased approach, starting with two key datasets – financial account information and card sales data; discusses progression from the current system of providing information annually within three months of receiving an HMRC notice towards ‘standing’ reporting obligations where data is provided to HMRC more frequently and more quickly, possibly closer to ‘real time’; proposes standardising the use of specific schema (likely a modified Common Reporting Standard schema) and mandating the collection of key data fields, alongside a reformed penalty regime.
- The consultation also sets out the government’s intention to require providers of financial account information and card sales data to collect tax identification information from customers, such as National Insurance numbers (NINOs), company registration numbers (CRNs) and/or VAT registration numbers (VRNs), and to conduct enhanced due diligence to verify the accuracy of tax ID numbers.
- Finally, the consultation explores, based on international examples, the possibility of requiring the reporting of a wider variety of financial information, such as dividends and other investment income.
- Timing: the consultation closes on 21 May 2025. There is no date given for when the proposals might come into effect.
Tax Admin
Modernising the tax system
Better use of third party data
Last updated: 07/05/2025
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