HM Revenue and Customs Brief 26/14 - Sharing VAT Data
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Issued 25 June 2014
HMRC sharing of non-financial VAT registration data and
Purpose of the Brief
HMRC data sharing measures are being taken forward in the
Small Business, Enterprise and Employment Bill which was announced in
the Queen’s Speech on 4 June 2014 and published on 25 June 2014. The
Government is seeking a power permitting HMRC to release non-financial
VAT registration data for specific purposes (principally credit
scoring) to a small number of qualifying parties (for example, credit
reference agencies), and is seeking a power to make regulations (after
consultation) to permit the release of exporter data as open data.
Who needs to read this?
VAT registered businesses and exporting businesses which may
benefit from having their data shared, for example through an improved
trade credit rating or through access to export data.
Potential users of the data which is expected to be released.
Sharing of non-financial VAT registration data
VAT registration data is drawn from the data collected or
created when traders register for VAT or update a registration. This
data includes the VAT registration number (VRN), business and/or
proprietor names, contact and status details (a full list is available
at Annex C in the Government’s consultation at the link below). The
data is identifying data only: no financial or payment data of any kind
The proposed legislation would give HMRC the power to release
non-financial VAT registration data on a strictly controlled basis for
these economically beneficial purposes: credit scoring, anti-fraud
checking, and compliance with other financial regulation. Potential
users include credit providers, credit reference agencies and other
business information providers.
In July 2013, the Government consulted on proposals to share
VAT registration data. HMRC also undertook a research project to assess
the potential benefits from the use of VAT registration data. Both
documents are available at the link below.
The research indicates that the use of VAT registration data
for credit scoring by credit reference agencies would increase
availability of trade credit to VAT registered businesses by up to £1.8
billion, with an estimated uptake of trade credit of between £0.7
billion - £1.4 billion. Smaller businesses, recently incorporated
businesses and unincorporated businesses (e.g. sole traders) would be
the main beneficiaries.
Data sharing will be subject to rigorous safeguards. Users
will be selected on transparent criteria based on their ability to use
the data for the permitted purposes and to comply with stringent
requirements. There will be sanctions for data misuse, including a
criminal sanction for unlawful disclosure of information relating to
identifiable businesses. In addition, the agreements for release will
contain rigorous rules and penalties for any breach, covering transfer,
handling and use, storage and destruction of the data. Guidance will be
published detailing the criteria for data sharing.
VAT registered businesses and their owners will be protected
against intrusions on privacy, fraud and other impacts (eg, increased
direct mail) by ensuring that the data can only be used for the
permitted purposes and cannot be passed on to other users. No financial
or payment data will be included in any release.
HMRC will not sell VAT registration data. It may recover costs
associated with data sharing in line with Government guidance.
In parallel, HMRC will continue to explore options for the
public release of a limited subset of VAT registration data as open
data. HMRC will work with stakeholders to identify data which might be
appropriate for a partial open data release. Release of a data field
will not be considered where it would impinge on personal privacy or
increase fraud risk.
background on the proposals and the documents referred to above (Opens
Sharing of exporter data
Information about exporters and the products they export is
collected by HMRC from a customs declaration which has to be submitted
to HMRC when goods are exported to non-EU countries.
The data being proposed for release as open data is the name
and address of the exporter, description and commodity code of the
goods and the month and year of export. No financial, duty or tax
information is to be released.
Making a limited amount of export data available has the
potential for it to be used in ways that could generate real public
benefits without compromising the core principle of taxpayer
confidentiality. There is increasing interest from both the public and
private sectors in release of exporter data as a key information source
to generate benefits. It would make exporters more visible in the
global market place and significantly increase the ability for foreign
buyers to search for and buy British products and help public and
private sector efforts to provide better targeted and appropriate
services to exporting businesses, especially SMEs.
This information is already largely in the public domain
having being placed there by businesses themselves, for example in
business directories and advertising on the internet and elsewhere, and
on commercial stationery and invoices. However, the data is not always
readily accessible or systematically available as a full set and may
not always be managed and kept up to date. Release by HMRC of exporter
data would provide a comprehensive source of accurate and up to date
HMRC has made similar information on importers available for
over 25 years and we are not aware of any issues. Restricting proposals
on publication of exporter data to a core set of similar, potentially
less contentious but still valuable information would provide a
credible minimum data release that could realise a range of benefits
without compromising privacy or commercial confidentiality interests.
HMRC will be undertaking a full 12 week consultation on the
proposal to release a specific export data set. This will be done in
parallel with the passage of enabling legislation through Parliament
and importantly before any regulation necessary to implement the
measure is introduced.
The consultation: Sharing and publishing export data for public benefit
(Opens new window)
The measures are being taken forward in the Small Business,
Enterprise and Employment Bill.
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Article Published/Sorted/Amended on Scopulus 2014-07-01 09:08:47 in Tax Articles