HMRC has issued a guidance note to explain how such data is used to check the monthly income of businesses. It will match the data received by merchant acquirers against taxpayer records to identify people who fail to report, or deliberately under-report, their business income.

There are eight major merchant acquirer businesses operating in the UK which process all credit and debit card transactions for UK businesses.

The data allows HMRC to check that businesses are declaring all of their income and improve fraud detection. HMRC are also able to study the data to increase their understanding of the behaviours and compliance profile of businesses which receive credit and debit card income.

HMRC is advising businesses accepting credit and debit cards to check their processes if they are not confident that they are declaring all their income.

Legislation issued in 2013 gave HMRC new powers to request data from merchant acquirers.

More details are available at http://www.hmrc.gov.uk/news/merchant-aquirer.htm