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25 Jan 2024

With more than 500 cycle businesses having now signed up to its campaign for change to the Cycle to Work scheme, a delegation from the Association of Cycle Traders has met with All Party...

24 Jan 2024

The Office for Product Safety and Standards (OPSS) is taking enforcement action and warning consumers about a brand of e-bike battery – UPP – that has been linked to a number of...

16 Jan 2024

Walton Street Cycles, one of Oxford’s oldest bike shops, has been trading in the city since 1975.
 

16 Jan 2024

ACT Gold Member ICE Trikes has announced a new partnership announcement with British Cycling’s Limitless disability and para-cycling programme. This partnership will help to support the...

15 Jan 2024

An interesting article has appeared in Forbes reflecting many of the issues that ACT members will be experiencing – the challenges and opportunities that are currently...

15 Jan 2024

The Guardian has reported that ministers decided to prioritise driving over active travel because of worries about “15-minute cities”.

15 Jan 2024

Go Outdoors, which operates 75 stores across the UK, has announced an apprenticeship scheme involving Cytech training with the aim of addressing what it terms a nationwide shortage of...

3 Jan 2024

gogeta, the new tax-free cycling platform that offers a better deal for retailers and bigger savings for customers, has published further details of its new Flexi Voucher, an industry first...

3 Jan 2024

Bike for Good, the Glasgow-based cycling charity and social enterprise, which delivers Cytech training in Scotland, has announced a Young Bike Mechanic Programme designed to create opportunities...

3 Jan 2024

With the UK economy set to tread water in 2024, the KPMG/RetailNext Retail Think Tank (RTT), an independent board of retail experts, expects this will impact growth within the retail sector.

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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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