The ‘Connect’ computer system created by HM Revenue & Customs to assist in identifying people who are paying less tax than is due is being used for the first time in the current tax year.
Instead of relying purely on information provided by taxpayers through their tax returns, Connect draws from many government sources, banks and other financial institutions to produce a composite picture of taxpayers’ financial affairs.
Sources include credit card companies, telecoms companies, Airbnb, eBay and the Land Registry, through which property sales and purchases can be tracked and further links revealed to data on letting arrangements. Questions of affordability and the source of funds may then be raised.
Discrepancies between the resulting figures and what has been declared will be investigated, and 10,000 letters have already been sent to taxpayers in relation to the tax year 2014/15.
The so-called ‘snoopers’ charter’, which enables such surveillance, is not confined to the UK. HMRC can also access information from the authorities in 60 overseas countries.
For further information, please contact one of our advisers.