Thursday, 12 December 2013

Watch out for the tax snoopers!

Without wishing to sound overly paranoid, we all know that ‘Big Brother’ is watching us. While we’re not yet monitored night and day as in George Orwell’s dystopian vision, there are few places we can go where we’re not caught on CCTV. Google Maps allows the curious at one end of the country to check out where we live and what car we drive.

The online world provides snooping possibilities for anyone intent on gathering information about us. People now commonly share things about themselves via social media that they would not have dreamed of divulging a decade ago. With these snippets of information, the snooper can build up an extraordinarily detailed picture of our lifestyles, where we live and work and what we get up to in our free time. And knowing how inaccurate HMRC records are I fear that people will be harassed without due cause!

So, what is HMRC doing to monitor us? It used to be the case that a local tax inspector would, if they had suspicions, spy on homeowners and trawl through the local media searching for information about lifestyles inconsistent with declared income. Now, sophisticated computer systems are employed to stay one step ahead, which is, in many ways, no bad thing, provided that we know how our data is being used, and why. There are inherent dangers in untrammelled snooping powers, not to mention clashes with legislation designed to protect our civil liberties.

Images, news stories, planning information and social media are all easily accessible, but Her Majesty’s Revenue and Customs also has more sophisticated tools at its disposal. Perhaps the most sophisticated weapon in HMRC’s armoury is something called ‘Connect’. This massive computer database contains over a billion records including taxpayer records, information from third parties and the Internet. It includes interest on bank accounts, business ownership details and information from overseas tax authorities. It has successfully revealed information on undisclosed overseas income, undisclosed literary income and assets omitted from IHT returns. Since being set up in 2010, it has so far yielded over £2bn in additional tax and is now in the process of being upgraded. One of the areas to be upgraded is HMRC’s ‘web robot’ software which trawls the Internet for information on taxpayers. Of course, anyone can support the taxman’s attempts to claw back undeclared income. My uneasiness stems from a suspicion that HMRC’s tax investigation activities are only the start of a more sophisticated and shadowy ‘Snooper’s Charter’, which may prove to be more ‘1984’ than 2014.