Since 2009 HMRC has been using its software known as Connect. This system compares taxpayer tax return records to more than one billion pieces of information. Most people will not be surprised by some of its uses but others are slightly more “Big Brother”. Here are a few of the things HMRC are likely to check:
- HMRC can compare our tax return entries with information submitted by Employers and Pension providers and immediately come up with any differences.
- HMRC also compare interest figures included on our tax returns to interest figures from banks and buildings societies, not only to check that the correct amount has been declared but to ensure that ISA limits have not been exceeded.
- Connect checks not only UK bank accounts but accounts in 25 other countries.
- If we claim relief on pension contributions, Connect can look into our pension funds to check that the contributions have gone in.
- Connect lets HMRC compare land registry records for cases of multiple property ownership to check for undeclared rent and capital gains.
- HMRC polices e-marketplaces such as Ebay for unusually high activity that may indicate a business, rather than just selling personal items.
- HMRC can link into DVLC records to see which cars we drive to satisfy themselves that our income matches our lifestyle. It can also spy on our Facebook pages for evidence of exotic holidays, or other evidence of our lifestyles.
- It is believed that HMRC has access to airline records to check journeys in and out of the UK
Penalties for getting tax returns wrong are severe; so far this software has raised in excess of £3b in extra tax revenues. Here at Hilton Sharp and Clarke we can help with your tax return and negotiating with HMRC if you do find yourself on the wrong end of an enquiry. For further information please contact Karen Oliver