The purpose of the consultation is to explore: 

• options for improving the quality of financial account information (eg, bank and building society interest) and data on card sales that is already acquired by HMRC under its data-gathering powers. This includes more frequent reporting of information; and 
• the possibility of collecting new data from financial institutions on dividend income and other income from investments. 

The government hopes that new and improved third-party data will help HMRC to: 

• improve the services it provides to taxpayers; for example, by accurately pre-populating more sources of income in tax returns;
• further close the tax gap; and 
• modernise and reform the tax system. 

In Representation 39/25, ICAEW has expressed its support for the better use of third-party data provided to HMRC, agreeing that this could lead to increased accuracy in reporting, as well as saving time for both HMRC and the taxpayer. However, ICAEW believes it is important that the data is provided securely and accurately, and that the scope for errors in matching information to taxpayers’ records is minimised. 

ICAEW believes that, when imposing additional reporting burdens on third parties, HMRC should consider how it will use that data to improve services for taxpayers and agents and secure the investment to use the data, not just to collect it. For bank and building society interest, ICAEW believes that moving to quarterly reporting will be sufficient. 

ICAEW is concerned about the use of national insurance numbers (NINOs) as an identifier for individual customers. ICAEW believes that a relatively large population of individuals may not be eligible for a NINO and that an alternative should be offered so institutions do not end up excluding or debanking those individuals.