Taxman is snooping on emails and social media – and now holds 55 BILLION items of our data on its AI system in a bid to tackle tax evasion
- HMRC uses a system to target those evading and avoiding tax
- It holds data on social media, emails and our banking transactions
- Tax experts PfP claim the taxman now holds up to 55bn items of data
The rise of programmes like ChatGPT has made everyone sit up and take notice of the creeping influence of artificial intelligence (AI) and data mining.
But did you know the taxman has been using its own data system for years to snoop on taxpayers?
HMRC holds billions of our data items, including email and bank records, as part of its system used to target taxpayers for investigations.
It has revealed that there are now 55billion items of data relating to taxpayers in its ‘Connect’ system, which was launched to tackle the growing tax gap, according to tax investigation insurance experts PfP.
HMRC’s Connect system now holds 55bn items of taxpayers’ data as it cracks down on tax avoidance
The tax gap is the difference between the tax that should be paid and the amount HMRC actually collects and last year the figure stood at £32billion.
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 Legistry to overseas bank accounts and investment accounts.
We recently wrote about the growing numbers of buy-to-let landlords who have been caught out by a renewed push on taxes from HMRC.
The taxman found 5,429 landlords did not declare enough income tax in 2022/23, up 83 per cent in a year.
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 per cent 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 system means innocent individuals are coming under the taxman’s investigations.
Kevin Igoe, managing director of PfP says: ‘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.’
