HMRC Is Widening Its Data Net on Interest Income and Card Sales — A Checklist for Freelancers
If you're self-employed or run a small business, HMRC is about to see a lot more of your financial picture automatically — before you've even filled in a return.
If you're self-employed or run a small business, HMRC is about to see a lot more of your financial picture automatically — before you've even filled in a return.
What's changing
On 20 July 2026, HMRC published draft regulations aimed at improving the quality and consistency of the data it receives on interest income and card sales data, according to Tax Journal's summary of recent HMRC manual changes and ICAEW's tax news roundup. The stated goal is to let HMRC better match third-party data — what banks and card payment processors report — against what individuals and businesses declare on their own returns, and to power more "digital prompts and nudges" when the two don't line up.
In practice, this builds on an existing trend: banks already report interest income to HMRC, and card providers already report transaction volumes. What's changing is the consistency and granularity of that data, making mismatches easier for HMRC's systems to spot automatically, rather than relying on manual investigation.
Why this matters if you're self-employed
If your declared turnover looks low relative to what your card machine or payment processor is reporting to HMRC, that gap is now more likely to trigger an automated flag. This isn't a change to what you owe — it's a change to how quickly and reliably HMRC notices if your return doesn't match the data it already holds.
This lands alongside a separate but related deadline: agents have until 31 July 2026 to opt out of HMRC's new mandatory multi-factor authentication system before a security upgrade rolls out across all agent accounts between 28 September and 15 October 2026.
Self-assessment readiness checklist
- Reconcile your card sales against your bookkeeping now, rather than waiting until your return is due — check your payment processor's annual summary matches what you've recorded as turnover.
- Declare all interest income, even small amounts from business or personal savings accounts — banks already report this automatically, so omissions are increasingly easy for HMRC to spot.
- Keep records of cash sales separately and clearly, since card data reporting only covers the card side of your income.
- Check your accounting software is categorising card fees and refunds correctly — gross card sales figures can look inflated if refunds aren't netted off properly.
- If you use an agent or accountant, ask them directly whether they're prepared for the MFA deadline and data changes, so your filing isn't disrupted.
- File early where possible — a return that's already reconciled against third-party data is far less likely to attract a nudge or enquiry.
The bigger picture
This is part of a wider pattern: the UK's tax gap — the difference between tax owed and tax collected — rose to 6.4% in 2024/25, up from 5.3% the year before, with small businesses accounting for 62% of that total gap, according to earlier HMRC data covered by tax practitioners this month. Better data-matching on interest and card sales is a direct response to that gap, and more automated cross-checking should be expected as the norm going forward, not a one-off initiative.
International comparison
The US IRS already receives extensive third-party reporting through Forms 1099-K (payment card and third-party network transactions) and 1099-INT (interest income), a system the UK's changes broadly mirror. Australia's ATO uses similarly extensive data-matching from banks and payment processors as part of its long-standing "data matching program." The EU has no single harmonised system, but many member states, including Germany and France, have expanded real-time transaction reporting requirements for VAT purposes in recent years.
Key Numbers
- 20 July 2026 — date HMRC published its draft data regulations
- 31 July 2026 — deadline for agents to opt out of mandatory MFA
- 6.4% — UK tax gap for 2024/25, up from 5.3%
- 62% — share of the tax gap attributed to small businesses
Sources
Educational content only — not financial advice.