Did you know that HMRC have a system called Connect that collects data on all of us. In May 2023 HMRC stated that the system held over 55 billion pieces of data. It is thought that this has increased exponentially and could now be as high as 80 billion. By using this data and AI the system picks taxpayers which HMRC should look at in more detail.
So, what details does this hold. You would be surprised with some of the data it is able to collect. Some of the sources are:
- Credit card details
- Mortgage/loan applications
- Paypal
- Amazon/Ebay accounts
- Supermarket loyalty cards
- Foreign information from certain countries
- Council Tax Records
- Details of flight sales
If you add in the details held on governmental computers, it is easy to see how the data adds up.
If we look at some of the above, you can see that they would use say the council tax records to look at properties held by individuals such as holiday homes. The flight details would show if individuals were taking flights/holidays. All of these allow the AI to see if someone is spending more than their returns show that they have.
There have been issues where people have made mortgage applications which show higher earnings/profits from that shown on the tax returns. This again is a red flag against your name.
One issue that could potentially be a problem is if you have a common name. For instance, there are over 30,000 John Smiths in the UK. It is entirely possible for the data to be linked to the wrong John Smith. However, this does not stop an enquiry being started into you and you having to prove that you are not the correct person.
All of these enquiries can be costly to deal with even if the information does not belong to you. It can be time consuming, and we have seen detrimental to health. It is vital to consider fee protection insurance which could cover the costs of any enquiry opened by HMRC. Your normal accountancy package will not cover these additional fees. An average enquiry can cost a business / individual around £2,500.
Contact us if you feel that you would like to protect yourself.
