360 Accounts & Bookkeeping Ltd

    HMRC third-party data, card sales and bank interest

    ComplianceUpdated 14 October 2026

    HMRC third-party data, card sales and bank interest

    Overview

    HMRC is developing more consistent reporting of card sales and interest income by banks, building societies, merchant acquirers and payment facilitators. The aim is to improve matching to taxpayer records, support digital reminders and target compliance activity more effectively.

    The legal framework is in Schedule 23 to the Finance Act 2026. A technical consultation on draft implementing regulations, data specifications and guidance ran from 20th July to 20th August 2026. As at 14th October 2026, HMRC’s consultation page says feedback is being analysed. The published implementation date is 6th April 2028, but the detailed requirements should be checked against the final regulations and guidance.

    For clients of 360 Accounts & Bookkeeping, the practical priority is accurate reconciliation of sales, processor settlements and interest. A difference between third-party data and a tax return is not automatically evidence of undeclared income, but you should be able to explain it with clear records.

    Detailed Content

    What is changing?

    HMRC already receives card-sales and interest information under existing data-gathering arrangements. The new framework is intended to introduce ongoing reporting by in-scope data holders without HMRC first issuing an individual reporting notice.

    Under the draft regulations:

    • Merchant acquirers would report card-sales data monthly.

    • Financial institutions would report interest on current and savings accounts quarterly, with certain other interest reported annually.

    • Data holders would collect relevant identifying information and carry out verification checks.

    These are obligations for the organisations supplying data to HMRC, not a new requirement for every ordinary business to submit its own monthly card-sales report under this measure.

    The reporting scope depends on the provider, service and account. Businesses using card readers, online checkouts or payment links should retain the relevant reports, but should not assume that every transaction handled by a named payment brand is covered in exactly the same way.

    Why do identifiers matter?

    The draft arrangements include National Insurance numbers for relevant individuals, company registration numbers for companies accepting card payments, and VAT registration numbers where applicable. The precise collection requirements and exceptions depend on the account and data category.

    ICAEW has confirmed concerns about National Insurance numbers as identifiers, challenging implementation timescales, and the arrangements for preventing and correcting errors. These are consultation concerns, not evidence that a particular client’s data is wrong.

    Keep your name, address, legal entity and relevant registration details up to date with your bank and payment provider. Verify any request for sensitive information through the provider’s official website, app or established contact details before responding.

    Why card sales may differ from bank receipts

    The amount paid into your bank is often not the same as your gross card sales. Processor fees, refunds, chargebacks, reserves and settlement timing can all create differences.

    For example, if a processor collects £120 from a customer and retains a £3 fee, the £117 bank deposit should not automatically be treated as the entire sale. Record the sale, any VAT due and the fee correctly, and reconcile the settlement.

    VAT-inclusive takings can also differ from VAT-exclusive turnover. Accounting dates, currency conversion and transactions crossing a reporting-period boundary may explain further differences. Avoid double-counting sales imported through both a sales platform and a payment feed.

    How bank interest should be handled

    Check interest statements against the accounts or personal tax records to which the interest belongs. A company’s interest income belongs to the company, not automatically to its director.

    Reporting information to HMRC does not, by itself, establish that tax is payable. Personal allowances, exemptions and account ownership may affect the treatment. Personal savings interest is not automatically sole-trader turnover, and the proposed reporting rules include exclusions for certain accounts and investments.

    What about compliance checks and Making Tax Digital?

    Improved data matching may help HMRC identify discrepancies and select cases for further contact. However, a mismatch does not automatically trigger a formal enquiry or prove that a return is incorrect. Third-party information may itself need correcting.

    Making Tax Digital for Income Tax is a separate regime. For individuals within its scope, quarterly updates provide cumulative summaries of self-employment and property income and expenses, not individual invoices or receipts. Savings interest is not included in those quarterly updates. There is no verified basis for saying that every update automatically generates a new third-party matching check.

    Step-by-Step Procedure

    Step 1: Reconcile monthly. Match sales records to processor reports and bank settlements. Explain fees, refunds, chargebacks, reserves, VAT and timing differences.

    Step 2: Record each income source correctly. Include card sales, cash sales, bank transfers and relevant interest, while separating company income from personal income and avoiding duplicate entries.

    Step 3: Investigate discrepancies before changing figures. Establish whether the issue is in your bookkeeping, the reporting period or the provider’s information. Keep a reconciliation and supporting evidence.

    Step 4: Correct errors through the appropriate route. A bookkeeping correction alone does not amend an already filed return. Ask your accountant about the relevant amendment or disclosure procedure and contact the provider if its records are wrong.

    Step 5: Retain supporting records. Self-employed business records normally need to be kept for at least five years after the relevant 31st January submission deadline. Company accounting records normally need to be kept for six years from the end of the last company financial year they relate to. Longer retention can be required in particular circumstances.

    Step 6: Review historic issues proportionately. Do not use five years as a universal limit on HMRC’s powers. If you identify an older error or receive an HMRC letter, seek advice on the affected periods and the appropriate response.

    Frequently Asked Questions

    Can HMRC receive information about my card sales?

    Yes. Existing reporting arrangements already cover relevant card-sales information. The new framework is intended to improve its consistency, identification and reporting frequency from April 2028. It is not the same as HMRC having unrestricted live access to every transaction in your account.

    Does this affect sole traders or just limited companies?

    It can be relevant to sole traders, partnerships and limited companies accepting card payments, as well as individuals and other account holders receiving reportable interest. The detailed coverage depends on the provider, account and statutory exclusions.

    What should I do if HMRC’s information does not match my records?

    Obtain the underlying statements and reconcile the difference. Do not change correct records simply to force a match. If HMRC has contacted you, respond within the stated deadline and ask your accountant to help explain or correct the position.

    Is the consultation still open?

    No. This specific technical consultation closed on 20th August 2026, not 7th September 2026. At the review date, HMRC says it is analysing feedback.

    Is this part of Finance Bill 2026–27?

    The published consultation concerns draft secondary legislation and associated documents under Schedule 23 to the Finance Act 2026. It should not be described simply as new draft clauses in Finance Bill 2026–27.

    Should I wait until April 2028 to improve my records?

    No. Accurate bookkeeping and complete tax returns are already required. Regular reconciliation makes errors easier to find and provides evidence if HMRC asks questions. Check the final implementation guidance before relying on the draft operational details.

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