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27 Feb 2024

The inaugural Cycling Electric magazine Demo Day will take place on Sunday, April 28th, at the Lee Valley VeloPark in London.

27 Feb 2024

New research from the European Cyclists' Federation (ECF), a Brussels-based advocacy group, has confirmed that if a city has more bike lanes, more people will cycle. The results will give...

13 Feb 2024

2024 is well underway and we’re just around the corner from the Spring Statement and for the retail sector it’s pretty much business as usual…or is it?

13 Feb 2024

Fabian Hamilton MP, co-chair of the Walking and Cycling All-Party Parliamentary Group, has said that the Cycle to Work scheme "must be reformed".

13 Feb 2024

The British Independent Retailers Association (Bira) has called for a series of cost-saving measures in the next Budget to help boost business.

12 Feb 2024

People across England are missing out on a slew of health, wellbeing and environmental benefits due to half a century of “chronic underfunding” of its streets, according to Cycling...

12 Feb 2024

ACT member and Cytech-accredited Pauls Cycles in Dereham, Norfolk has said its electric bike sales have increased by a quarter since October, despite predictions they would drop off over...

9 Feb 2024

Guy Opperman, the Minister for Roads and Local Transport at the Department for Transport, whose focuses among other things on cycling and active travel, has attended a meeting of...

2 Feb 2024

The Department for Transport (DfT) has published new information on how to safely purchase, charge and use e-bikes and e-scooters in an effort to improve consumer safety.
Following...

30 Jan 2024

Cyclists in Warwickshire rode around the world during December as part of an initiative to encourage safe winter cycling.
 

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HMRC now holds 55 billion items of taxpayers' data as it bids to tackle tax evasion

Posted on in Business News , Cycles News

It has been reported by This Is Money that HMRC now holds 55 billion items of taxpayers' data, including email and bank records, as it cracks down on tax avoidance. The data is held on its AI-driven 'Connect' system, which was launched to tackle the growing tax gap, according to tax investigation insurance experts PfP.

HMRC logo

The tax gap is the difference between the tax that should be paid and the amount HMRC collects and last year the figure stood at £32 billion.

HMRC introduced its Connect system in 2010 to narrow this gap by using data to identify potential cases of tax evasion and avoidance and is used by HMRC to select individuals or businesses for further investigation.

The aim is to speed up the process of detecting and fraud and evasion by cross-referencing business's and people's tax records with other databases. It looks at everything from property ownership data from the Land Registry to overseas bank accounts and investment accounts.

The Connect system also looks at social media posts, bank and credit card records, DVLA records, social media posts, and most concerningly of all, HMRC will sweep your browsing history and email records too. PfP says this database has now grown to 6100 gigabytes of taxpayer data.

HMRC has been under pressure to recoup tax revenue after parliament's spending watchdog revealed a sharp fall in investigations over the pandemic cost the Government £9billion.

In December, the National Audit Office said HMRC had investigated around 30% fewer compliance cases between 2020 and 2021 compared with the previous year.

But now there are concerns that HMRC's blanket approach to collecting the data through its AI system means innocent individuals are coming under the taxman's investigations.

Kevin Igoe, managing director of PfP told This Is Money: 'Connect is now at the core of HMRC's tax investigations.
'It allows HMRC to analyse billions of data points to pinpoint taxpayers for closer scrutiny.

'It's an incredibly complex and intelligent computer system. However, the system can easily produce "false positives" and trigger investigations into innocent individuals and businesses.

'Due to the "automatic" nature of the Connect system, innocent taxpayers can end up under investigation through no fault of their own.'

A HMRC spokesperson told This Is Money: 'Connect is a powerful analytical tool that we have used since 2010, which has helped make us a world leader in using data and insight to inform and manage risk.

'The Connect system is not the sole deciding factor in beginning or deciding the direction of a tax investigation.

'Other factors are also considered and human insight always makes the final judgement.'
 

Tax investigtation protection


ACT members can access protection in the event of a PAYE or a VAT inspection.
Every individual business is at risk of tax investigation. In the event of a tax investigation our members are covered* with our long-standing partner DAS.
 
The complexities of the tax system can prove really challenging. Regardless of how well you or your accountants complete your tax returns you can still end up involved in a dispute with HMRC. A tax investigation can be carried out for absolutely no reason at all, and random spot checks are undertaken to help ensure businesses are paying the required amount of tax.

HMRC can investigate a business at any time, even years after it has closed. On average, an investigation takes around 16 months.  These disputes can be expensive, time consuming and stressful, so make sure you're protected.

For more information, click here.

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