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October/November 2017


HMRC or Big Brother?

The surprising information sources used

As Celebrity Big Brother consumed UK TV screens over the summer, have you ever thought about a different type of Big Brother that may be keeping its eye on you, and more importantly, your financial footprint? HMRC’s powerful “Connect” system was fully deployed at the beginning of 2017, but has been years in the making and is thought to have cost around £100m to build. Connect draws on information from a myriad of government and corporate sources to create a profile of each taxpayer’s total income, and some of these sources will come as a surprise to many, as they include; • Airline passenger lists • Banks • Chip & pin merchants • Credit agencies • Department for Work and Pensions • DVLA • Electoral roll • Email records • Insurance companies • Internet • Land registry

• Lettings agents • Newspapers • Overseas information exchange • Property websites • Social media Everyone leaves a digital footprint of where they are, what they do and what they spend, and Connect uses this to paint a very specific picture of each taxpayer. The system can crunch data at every digital step you take, whether it’s renting an apartment on Airbnb, or buying something on eBay. It doesn’t stop there either, Connect can also access Land Registry records to see houses purchased, ensure correct tax has been paid, and it can even determine if a property is being rented out and whether that income has been declared. The system can dig even further, and identify whether a person is likely to be able to afford such properties, and in contrast, whether they are potential suspects for previously having undeclared income or savings. Connect can access any transactions you make through Visa or Mastercard too, and the

system can highlight areas of likely underpayments, and even find specific details of individuals’ payments where necessary. In the ever-digital world we live in, the majority of us have some sort of social media presence and yes, you guessed it – Connect uses social media too. The system can use public social media account information, including details visible on Twitter, Facebook and Instagram that might reveal more about an individual’s spending habits, which could in turn indicate someone having more money than declared in comparison to their showcased lifestyle. HMRC will also be one of the government bodies to gain access to information under new laws known commonly as the ‘snoopers’ charter’. This legislation means telecom providers can store customer web browsing and email records for at least one year, which can then be accessed by the Government. There are positives to this ‘Big Brother’ approach, as HMRC is also using these powers to warn individuals to check that they have

not underpaid. They do this by gathering information from banks, peer-to-peer lenders and other financial institutions, checking it against tax returns, and then sending letters to those with discrepancies. For example, in July 2017, HMRC sent 40,000 letters to people it believed were failing to pay tax due on property investments, all with the help of Connect. So, what do you think? A useful information gatherer or an imposing big brother system? We would love to hear your thoughts on this; you can tweet us @lwaltd, but make sure Connect isn’t watching!

Les Leavitt Leavitt Walmsley Associates Chartered Certified Accountants

GM Business Connect Oct.Nov 2017  

October/November Edition of Greater Manchester's fastest growing B2B Magazine