HMRC’s groundbreaking software application has allowed the Revenue to collate more evidence than ever before as part of its war on avoidance.
According to accountancy firm BDO, the taxman’s Connect system can access around 30 different databases and collate information about an individual’s properties, cars, bank accounts and loans. The data is then pored over by a team of 150 analysts, whose job it is to weed out behaviours that suggest tax anomalies.
BDO reveals that the system has generated over £3 billion in additional tax revenue to date, while preventing the loss of a further £4.1 billion. HMRC also wants Connect to play clairvoyant and use its findings to prevent evasion, rather than detecting it after the event.
In addition to the information mentioned above, the Revenue also has access to data from insurance companies and hospitals, alongside credit card transactions. Assets held overseas are not safe from HMRC’s reach either, as Connect allows the taxman access to details from 25 EU member states.
Meanwhile, as we have previously reported, the Revenue has also taken to snooping on social media to garner information on taxpayers. This is coupled with a spike in the amount of money HMRC has paid whistleblowers.
BDO warned that there will soon be few places left where unscrupulous individuals can hide from HMRC. It advised taxpayers to make voluntary disclosures before a full investigation is launched.
The firm said: “Unprompted disclosures usually qualify for lower penalty rates. Where no specific campaign disclosure facility is on offer, it is still possible to make a voluntary disclosure direct to HMRC, and, in some cases, use the Liechtenstein disclosure facility to put things right.”
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