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12 Mar 2024

ACT parent company, Bira – the British Independent Retailers’ Association -  has said that the Chancellor’s decision to reduce national insurance rates could offer a...

11 Mar 2024

The Cycle to Work Alliance and the Association of Cycle Traders have identified common areas of interest around Cycle to Work reform.

11 Mar 2024

Cytech, the internationally recognised training and accreditation scheme for bicycle technicians, has launched a new Facebook group - the Cytech Tech Forum –...

11 Mar 2024

Proposed government changes to regulations and legislation governing EAPCs (Electrically assisted pedal cycles), which could see a doubling in the power of e-bikes to 500W and allowing ebikes to...

8 Mar 2024

Daniel Blackham, editor of industry magazine BikeBiz, has been writing about his experience of completing the Cytech technical one qualification at training provider Spokes People in Milton...

7 Mar 2024

ACT member and Cytech-accredited retailer JE James Cycles – one of the largest independent cycle retailers in Europe – is to open a new 7,874 sq ft store shop in Barnsley town...

6 Mar 2024

Cytech partner Activate Cycle Academy, the largest and most recognised training provider of bike maintenance and technical training courses to the UK’s cycle industry, recently welcomed a...

29 Feb 2024

Retailers looking for a payment solution that facilitates in-person, remote and online payments should look at what’s on offer from ACT partner Global Payments.
 

29 Feb 2024

The ACT is happy to confirm the date for Local Bike Shop Day 2024 as Saturday 4 May, the weekend of the early May Bank Holiday.

27 Feb 2024

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

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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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