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29 Jun 2023

With this Saturday and Sunday marking Independents’ Day weekend, the culmination of the annual campaign to promote independent retailers around the UK, ACT member Elmy Cycles in Ipswich...

29 Jun 2023

The new Consumer Duty comes into force on 31 July 2023 for new and existing products and services. The aim is to set higher and clearer standards of consumer protection and to require firms to...

29 Jun 2023

Bicycle sales slowed sharply in Europe in 2022 after strong growth during the pandemic. But whilst traditional bicycles were less in demand electric bikes continued their explosion, the European...

29 Jun 2023

gogeta says it is set to shake up the Cycle to Work Scheme industry by offering partner bike shops the lowest commission fees in the industry at 4%, with an introductory offer of 3% until 31st...

26 Jun 2023

Transport for London (TfL) has launched a new Cycling Action Plan with the aim of increasing the number of journeys made in the capital by bike by a third by the end of the decade, with...

16 Jun 2023

Giant UK have partnered with Activate Cycle Academy and the Association of Cycle Traders (ACT) to provide a Cytech Technical e-Bike qualification

15 Jun 2023

Hubtiger has been revolutionising service and repair operations for numerous service-based shops with their powerful software. Now, they are thrilled to announce the expansion of their software...

15 Jun 2023

A new and improved traineeship programme for women and non-binary people being implemented by  Bike for Good, which delivers Cytech training in Scotland, is proving successful.

14 Jun 2023

The introduction of a 'death by dangerous cycling' law, proposed by then-Transport Secretary Grant Shapps last year, is unlikely to be passed before the next general election due to a lack of...

14 Jun 2023

ACT Gold Member Don Valley Cycles, dubbed “Doncaster’s favourite” cycle shop, has marked its 30th anniversary in business with a 300-mile bike ride.

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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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