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25 Jul 2023

Norwich has triumphed ahead of Newcastle and Belfast to be named the most cycle-friendly city in the UK, scoring  high marks for categories like cycle routes, bike sharing schemes and...

25 Jul 2023

ACT member BikeTown in Rutherglen is to hold a cycling festival in the lead-up to the 2023 UCI Cycling World Championships.

24 Jul 2023

Eleven local authorities in England have been funded to enable health workers prescribe walking and cycling to patients.

24 Jul 2023

Cycling Electric has run an interesting article on the value of buying an e-bike from a local independent bike shop.

11 Jul 2023

Charity Cycling UK has launched The Big Bike Revival 2023 to support new and returning cyclists through a programme of free events.

11 Jul 2023

A survey undertaken by ACT members The Electric Bike Shop has shown that specialist bike retailers are continuing to see the benefit of having physical high street stores over a pure ecommerce...

11 Jul 2023

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

11 Jul 2023

As of 30th June 2023, the registered Head Office for V12 has relocated, and as a result their registered office address has changed.

3 Jul 2023

Cytech, the internationally recognised training and accreditation scheme for bicycle technicians, has announced that Whistler Adventure School (WAS), a private career training institution in...

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...

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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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