It is going to be much harder to keep secrets from the tax man in future with the recent launch of HMRC’s Connect computer system.
The system has automatic access to numerous government and private sector information sources. The list of places it has access too is frighteningly large. It includes;
- UK and overseas banks
- Credit card companies
- Credit reference agancies
- Land Registry
- Online market places such as AirBnB and eBay
- A variety of social media accounts
The objective for the HMRC is check any discrepancies between the system’s profile of a taxpayer’s income and what is declared in their annual return. Connect is particularly powerful because it can cross check the financial profile with a lifestyle profile drawn from, for instance car ownership, property ownership and what people have posted on Facebook or Instagram. Furthermore HMRC can request, using the so-called “Snoopers Charter” legislation, further information about web-browsing history and even email records.
The ability of the system to identify mismatches in returns has already resulted in many thousands of people receiving letters asking them to check their returns. Some commentators have suggested that the number of tax investigations will further increase too. The system makes it easier for HMRC to conduct investigations because it has access to so much data and analytical capability, and it can identify potential issues at a much lower financial threshold.
Lewis Smith & Co. offers a tax fee protection scheme to help mitigate the costs and worry of dealing with an investigation. Even if you don’t feel you need the reassurance of that cover we have years of experience of dealing with HMRC. We are here to represent you and provide expert support if required.
Lewis Smith & Co. – Accountants for Stourbridge businesses.