Connect is sophisticated computer software and is the key data analysing tool used by HMRC. It was introduced in 2010 and was developed with the help of BAE Systems. It is said to have cost £100m, but has recovered more than £3bn in taxes since its launch.
Information held in the system currently includes:
UK and overseas bank account information
Debit & Credit transaction information for the last 4 years
Land Registry property ownership information
UK Border Agency details of entry into and departure from the UK and the intended destinations
Companies House information
HMRC data – SA, VAT and Company taxation returns submitted
DVLA – cars owned
Insurance and healthcare membership details
Information from various data thefts – eg: the Panama and Paradise papers
Credit reference agency information
Online information including Facebook, Instagram, Paypal, eBay and Zoopla
Electoral roll details
Council data including Housing Benefit payments, council tax and business rates
Overseas yacht registers
And more data continues to be added each year.
HMRC is aiming to become one of the most digitally advanced tax administrations in the World.
Tax filings, compliance activity, information exchange and co-operation with other tax authorities around the world will be digital, real time and enforced with criminal and civil penalties across the broad range of UK taxes.
At the push of a button the worldwide financial and business affairs of an individual and their businesses will be reviewable and comparable to their annual UK tax returns.
It’s not an issue for non-wrong do-ers. Yet taxation is very emotive for individuals. Historically individuals look for ways to minimize tax. There is nothing wrong with legitimate use of legislation, but in a digital age, HMRC Connect will become more powerful. As AI develops, HMRC will inevitably bring AI tools into the mix.
New conversations are needed to discuss managing assets AFTER TAX rather than focus on before tax.