HMRC is watching you
The good old days when the tax inspector would trawl through reams and reams of paper records to find any irregularities within an individual or business account are long over.
HMRC have invested heavily in software known as Connect. The investment is believed to be in the region of £80 million and was brought into use in 2009.
The software brings together information from at least 28 different sources, including Companies House, Benefits office, Land Registry, UK and offshore banks, plus many more. It is rumoured that information from airline companies is also provided to HMRC and included within Connect. In total there are over 1 billion pieces of information within the Connect.
This information is automatically input and analysed by the software; therefore, what would have previously taken hours, now only takes a split second with a click of a button.
The system will throw out any discrepancies between the information on the system and information provided by the taxpayer; whether from the Self-Assessment tax return or the company tax return.
This software will therefore choose which individuals or businesses should be investigated. It is then the responsibility of the tax inspector to decide whether to take it any further and open an investigation.
Due to the quantity of sources from which Connect gets its information, there will soon be nowhere to hide for those evading tax. The software is still only five years old and is still growing. The more information it has, the more accurate it will be in identifying those who aren’t disclosing what they should.
If this is you, you are highly recommended to get your tax affairs up-to-date and correct before your name is thrown out of Connect. Financial penalties will be greatly reduced if the taxpayer informs HMRC of any errors, rather than waiting for HMRC to find them.
- HMRC has invested heavily in powerful software that processes data about businesses from numerous sources
- There are over 1 billion pieces of information within the Connect software
- The system compares this data with information provided by the taxpayer and throws out any discrepancies