Did you know HM Revenue & Customs is keeping a watchful eye on your financial life?
Using a software application called “Connect”, the taxman is able to liaise with other sources of information to keep a check on your money, where it comes from and what you do with it. These sources of data include banks (both here and in the EU), Land Registry, Companies House and social media. DVLA is also a partner and can pass over details of the vehicles you own, so that HMRC can make a judgement on whether your lifestyle is compatible with your wealth – or lack of it! Even an overview of photos and comments published on social media sites can give the Inspector cause for concern if he suspects you are not living within your declared means.
The scheme is designed to identify potential tax dodgers and recoup some of the estimated £100 billion lost by the Treasury every year due to fraud and non-compliant behaviour by both individuals and businesses. It is estimated that over £4billion has been collected since 2010 as a result of criminal investigations initiated by HMRC under the scheme.
In the majority of cases the taxman will write to the taxpayer, suggesting that the information on their self-assessment return is wrong with an invitation to correct the data – and a quick resolution can then be achieved – sometimes without penalty. Likewise voluntary disclosures made before any formal proceedings are instigated are considered sympathetically when it comes to issuing penalties.
If however, the taxpayer is not co-operative, a full enquiry will be launched and, particularly if the tax loss is likely to be considerable, a criminal investigation will ensue.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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