Tax plan to probe customer records ‘could cost millions’

Business groups today warned that a plan by HM Revenue & Customs to crack down on tax evasion by forcing businesses to provide information on customers could cost the UK "hundreds of millions of pounds a year".

HMRC can currently ask banks and estate agents for information on their customers to pursue unpaid taxes. But under the new plan, it will demand the right to ask all companies for data on business partners and customers.

The move has been greeted with condemnation by business analysts, especially in the current recession. Accountancy firm UHY Hacker Young described the scheme as "the latest step in a long line of Government initiatives to give HMRC potentially draconian, police-like powers".

Roy Maugham, tax partner at the firm, said: "These measures are going to impose an expensive red-tape burden at a time when businesses are desperately looking to control costs.

"It seems unfair that HMRC will not reimburse businesses for the costs they incur in performing a duty that should belong to the Government."