What info does the taxman’s super computer have on you?

What info does the taxman’s super computer have on you?

13 January 2017

Ahead of the January 31 deadline for 2015/16 tax returns, HM Revenue and Customs has released some details about its £100m ‘snooper computer’ that can tell if you aren’t paying enough tax.

The powerful super-computer known as ‘Connect’ draws information from lots of different sources, including some places you might not have thought about.

If the computer thinks that you have underpaid on your return then it will flag your account and prompt further investigation.

All this means that HMRC no longer needs to rely solely on information supplied by individual taxpayers. If you, accidently or otherwise, misreport your income then it could only be a matter of time before you get caught in the taxman’s web.

HMRC is already using the system to warn users that that they may have underpaid on previous tax returns.

What does Connect know?

Connect can access information from a wide variety of government and corporate sources, which it can use to evaluate an individual taxpayer’s total income.

Not just restricted to traditional earnings, the £100m system compiles information from government departments, large businesses and the internet to build up a profile of what you earn, what you spend and what you owe.

Here’s a summary of some of the data sources and what Connect can find out about you.

  • Earnings – Connect can find out about earnings from any employer, including those you worked for on a casual or ad-hoc basis. It can also find out about company benefits and any child benefit and maintenance payments.
  • Tax – HMRC’s computer instantly analyses information on council tax, VAT registrations, tax investigations and past tax returns.
  • Visa and Mastercard transactions – HMRC can access information on card transactions for investigations.
  • Land Registry records – HMRC can determine properties purchased and stamp duty paid. This information can be used to determine previously undeclared income or savings and can be used to ascertain if someone has undeclared rental income.
  • DVLA – HMRC can access information about cars purchased and owned, again pointing at undeclared income.
  • Online marketplaces – HMRC can access records from websites like eBay and Gumtree to identify frequent users and undeclared income.
  • UK and overseas bank accounts – From this year HMRC will receive information from banks in more than 60 countries.
  • Social media – Connect can compile data from public social media accounts like those on Twitter, Facebook and Instagram. This information could give HMRC more information about a taxpayer’s spending habits.
  • Web browsing and email records – The so-called ‘Snoopers Charter’ allows HMRC to access information about your internet activity for tax investigations.

HMRC has already started flexing its new computer-powered muscles. In a move that could be interpreted as a warning to those not paying their fair share, last month HMRC sent letters to 10,000 individuals it suspected of not declared enough savings interest from the 2014/15 tax year.

The taxman used information from banks, peer-to-peer lenders and other financial institutions and then cross-referenced this information against what taxpayers reported in their tax returns.

Miles Grady, Director of Umbrella.co.uk said: “Every year, HMRC gets better at spotting tax form errors. With the self-assessment deadline only a few weeks away, it’s more important than ever that you submit a water tight self-assessment.”

For more information visit www.umbrella.co.uk   Email: team@umbrella.co.uk