HMRC Connect system now holds 55bn data items in bid to tackle tax evasion
Taxman snoops on emails and social media – and now stores 55 BILLION items of our data in its AI system in an effort to crack down on tax evasion
- HMRC uses a system to target those who dodge and evade tax
- It contains data about social media, emails and our banking transactions
- Tax experts PfP claim that the IRS now holds up to 55 billion items of data
The rise of programs like ChatGPT has made everyone think about the creeping influence of artificial intelligence (AI) and data mining.
But did you know that the tax authorities have been using their own data system to spy on taxpayers for years?
HMRC holds billions of our data items, including email and bank details, as part of the system used to target taxpayers for investigations.
It has revealed that there are now 55 billion records related to taxpayers in its ‘Connect’ system, which was launched to address the growing tax gap, according to tax research insurance experts PfP.
HMRC’s Connect system now holds 55 billion items of taxpayer data as it cracks down on tax evasion
The tax gap is the difference between the tax payable and the amount HMRC actually collects and last year the figure was £32bn.
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 companies for further investigation.
The aim is to speed up the process of detecting fraud and evasion by comparing the tax data of companies and individuals with other databases.
It looks at everything from Land Legistry property records to foreign bank accounts and investment accounts.
We recently wrote about the growing number of homeowners who have been caught out by a renewed tax burden from HMRC.
The IRS found that 5,429 landlords did not declare enough income tax in 2022/23, an increase of 83 percent in one year.
The Connect system also looks at social media posts, bank and credit card details, DVLA records, social media posts, and most concerning of all, HMRC will also search your browsing history and email records.
PfP says this database has now grown to 6,100 gigabytes of taxpayer data.
HMRC is under pressure to recoup tax revenue after parliament’s spending watchdog revealed that the number of inquiries into the pandemic has cost the government £9bn.
In December, the National Audit Office said HMRC had investigated around 30 per cent fewer compliance cases between 2020 and 2021 compared to the previous year.
But now there are concerns that HMRC’s general approach to collecting the data through its AI system system is leading to innocent persons falling under the scrutiny of the tax authorities.
Kevin Igoe, Managing Director of PfP says: ‘Connect is now at the heart of HMRC’s tax research.
‘This allows HMRC to analyze billions of data points to locate taxpayers for further investigation.
“It’s an incredibly complex and intelligent computer system. However, the system can easily produce “false positives” and trigger investigations into innocent individuals and companies.
“The “automatic” nature of the Connect system allows innocent taxpayers to be investigated through no fault of their own.”
An HMRC spokesperson told This Is Money: ‘Connect is a powerful analytical tool that we have been using since 2010, making us a global leader in using data and insights to inform and manage risk.
“The Connect system is not the only deciding factor in starting or determining the direction of a tax investigation.
‘Other factors are also taken into account and human insight is always the final judgement.’