HMRC has spent a number of years and more than £100m developing what has in some quarters been dubbed the ‘snooper computer’, but what HMRC has named the Connect Computer System. This supercomputer has been designed to improve HMRC’s ability to identify those who are understating and underpaying their tax liability.
What does the Connect system do?
Instead of solely relying on the information included in tax returns, HMRC can now scrutinise taxpayers by drawing on a huge amount of information the Connect system collects. This includes data from government and corporate sources, as well as looking social media profiles, to gain an idea of a taxpayer’s expenditure. Where the information held by Connect does not necessarily tally with the tax return that has been submitted by an individual, the account is flagged and can be subject to further investigation.
What Information can HMRC access?
HMRC can now gather information from banks, peer-to-peer lenders and even platforms like Airbnb to build an accurate picture of an individual’s spending. It can also access Land Registry records to see whether any properties have been purchased and determine whether a taxpayer is likely to be able to afford such properties.
But there’s also plenty more; the Connect Computer System can also access:
- Visa and MasterCard transactions: Information on all payments
- DVLA: Details of vehicles purchased and owned
- The UK and overseas bank records: Information from banks in more than 60 countries
- Internal tax documents: Details of council tax paid, relevant VAT registration, last year’s tax return and previous tax investigations
- Earnings: Income received from casual employers, details of company benefits and child benefit and maintenance payments
- Online platforms: Trading activity on eBay, Gumtree and more
- Social media: Public social media account information from Facebook, Twitter and Instagram
- Web browsing and email records: The ‘Snoopers Charter’ allows HMRC to access digital information
This means that now, the preliminary work that once may have taken HMRC investigators weeks or even months can be completed in a matter of seconds. They can then evaluate the data and decide when it is compared to a taxpayer’s declared information, whether an investigation and what level of investigation should take place.
