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Revenue mulls small business credit database

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2nd Apr 2013
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HMRC's latest attempt to boost the SME sector will see it working with government departments to develop a small business credit database to help firms secure finance.

The Telegraph reports the “pilot scheme” run by HMRC could see companies’ VAT payments data being shared with credit ratings agencies, providing more reliable information to banks and other lenders.

The problem of viable small businesses being unable to secure credit has been dubbed “computer says no” banking.

If the proposals move forward, more information on small firms’ credit histories will be made available to lenders, especially newer banks, to help increase access to finance.

However, according to an HMRC spokesperson, the “speculating” Telegraph article “jumps the gun” somewhat and the idea of an SME credit database was “one out of many options” being considered by the Revenue.

The official HMRC statement reads: “HMRC is working with government departments and other stakeholders to look at how it can contribute towards helping the SME sector, including greater tax transparency with third parties. However, no announcements have yet been made.”

A spokesperson for the Department for Business Innovation & Skills told our sister publication BusinessZone.co.uk: “The pilot came about after [business minister] Michael Fallon wrote to the Treasury saying that this may be able to help with access to finance for SMEs.”

The former head of the CBI’s small business council, Russel Griggs, also told The Telegraph: “A lot of people don’t realise that in micro businesses, it’s you being judged, not the business. Your credit history as a consumer is actually as important as your business plan.

“Banks are supposed to apply all sorts of criteria to fit that but you should judge a business separately to how you judge a consumer,” he said.

Replies (5)

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By RICHARDMQBROOKS
02nd Apr 2013 18:01

SME credit scoring

A credit rating for an SME which shows the criteria used to arrive at the rating would be an improvement. Openness and transparency is needed by rating agencies to educate SME owners/ directors about what factors affect their business rating including, as Russell Griggs has commented, their own personal credit score. We can all get our personal credit information easily now. It will take some years before SME's understand how their company credit scores are arrived at and it will probably take longer to get more reliable credit scores.

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Locutus of Borg
By Locutus
02nd Apr 2013 18:18

Late April fool?

My first thought when I read this - is this a late April fool joke?

If HMRC really want to help the SME sector then why not just simplify the tax system?  That would help SMEs a lot.

I'm uncomfortable with the idea of HMRC sharing tax information with third parties.  My view is that tax information is always supposed to be confidential.

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ghm
By TaxTeddy
03rd Apr 2013 08:00

1984

Surely this is a good example of government having an awful lot of data - but not really knowing what is it for.

We will see this issue a lot more in the future - every time a bright spark in Whitehall says, "I know, why don't we.......".

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By Roland195
03rd Apr 2013 10:21

Eh?

Since when was it the role of HMRC to assist in business financing? Should they not try to focus on actually carrying out their current duties with some degree of competency?

 

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By GW
04th Apr 2013 11:33

Am I too cynical?

I thought credit rating agencies paid for sales ledger data.

Is this going to be another "we don't receive payments for having 0845 numbers" saga?

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