In 2008 HMRC introduced its Connect computer system, which collects, analyses and stores huge amounts of data, in the bid to identify the individuals that are not paying their correct tax quotas.
It is therefore not surprising that in September 2018 HM Revenue & Customs confirmed that it will “observe, monitor, record and retain internet data,” but what does this really mean?
Personal social media information is now being used by HMRC as an additional information source to trap tax fraudsters. In addition to it’s other ‘open source’ information such as internet sites, Companies House, land registry records and news reports, the internet data that is available on sites with no privacy settings installed, is being gathered. Once collected the personal and commercial data is then cross-referenced with a taxpayers’ declared income, to help identify cases of potential fraud.
The hugely successful Connect system has so far generated in excess of £3 billion in additional tax revenue since its introduction, and includes the use of data from blogs and social networking sites. And, by detailing its intentions and making them public, the HMRC’s intelligence work is now classed as ‘overt’ and not ‘covert’ surveillance, thus negating the need to get any specific authorisation for the investigations.
The collecting of data by HMRC is not new, as they have used many sources in the past including land registry records to identify individuals that have sold a second home but not declared any gains in their tax returns. And it is also widely known that HMRC have utilised images on Google Earth to identify expensive building renovations and extensions
But, online social media is now playing an important role in investigative work and risk analysis, with inspectors looking for evidence of lifestyles that do not match their declared income. With many fraud cases are now being backed up by posts on LinkedIn, Twitter, Instagram and Facebook as taxpayers detail their lavish holidays, cars, boats, champagne lifestyles and opulent weddings, it is all being taken into account!
However, it is important to note that HMRC are restricted to viewing only the public social media profiles, and cannot gain access if individuals make their accounts private. And, consideration must also be given to how accurate a lifestyle depicted on social media really is.