Posted by admin - October 31, 2014 9:12 am HMRC’s now better connected!

Back in 2009, HMRC introduced a new state of the art computer (Connect System) developed in association with BAE Systems Detica to increase the amount and accuracy of information available to their investigators and speed up the investigation process.

Better informed

This powerful computer system links taxpayers to over one billion pieces of information with data sources drawn from organisations including Companies House, the Land Registry, Benefits Agencies and onshore and offshore banks, to name a few. Thereafter, the system reviews this data with a taxpayer’s self-assessment return. The system is sophisticated enough that it can also flag up when an anticipated tax return is not submitted.

In addition to analysing collected data from all official sources, HMRC are also able to purchase additional information from commercial sources. The end result is a more comprehensive history for individual taxpayers accessible by more than 3000 HMRC investigators who can use this data in order to make a decision as to whether to make a challenge on a submitted tax return.

More analysts

Added to the number of HMRC investigators there are 150 analysts whose job it is to look for patterns and footprints in data to establish patterns of behaviour by groups or sectors of taxpayers. It is the work of these analysts that helps to drive tax initiatives, for example, setting up a taskforce to investigate certain industries/sectors where it appears there are issues of tax avoidance or non payment.

Increasing tax investigations

Although the Connect System cost £80m to develop it has, since its inception, helped to claw back an additional £3bn of tax revenues. With this detailed information the rise in enquiry selections is also increasing year on year from 62% in 2011/12 to 83% in 2013/14 and the yield is increasing too.

Paying the fair share of tax

Whilst many may see this all-seeing, all-knowing approach as intrusive, there are some benefits. Through the use of the Connect system, businesses and individuals who deliberately seek to avoid paying their fair share of are now easier to identify and the honest taxpayer can take heart that steps are being taken to address this matter. In addition, fewer errors in contacting taxpayers who have, in fact, paid their correct share of tax are being made through more detailed insight.

However, those businesses and individuals who have been able to previously dodge the UK tax system and think they can continue to do so need to be aware that “Big Brother” is now most definitely watching!