HMRC unleash ‘Connect’ computer to target tax evaders
HMRC’s powerful new “Connect” system is about to be unleashed on the general public zeroing in on anyone who may have failed to declare income they should be paying tax on.
With the deadline of the 31st January rapidly approaching, HMRC probably already know if you’ve been selling on eBay, renting your room out with Airbnb and even if you’ve been paid interest by your bank or building society.
Having invested millions in Connect, HMRC have been collecting information from Government departments, financial institutions (including traditional banks and peer to peer lending systems) as well as scanning eBay, Etsy and Amazon to see who’s trading there.
HMRC’s Connect is even scanning Land Registry records to see how much people are paying for property. If it appears unlikely that you could afford to pay for your house based on the income you declare than that alone would be enough to set alarm bells ringing and questions to be asked. Likewise HMRC can see anonymised information on Visa and Mastercard payments so they’ll have a rough idea if you’re spending way beyond the income you’re supposed to have.
It’s worth noting that the previous Chancellor George Osborne put in a provision to enable consumers to make £1000 profit selling on marketplaces before they had to declare themselves as a business and another £1000 renting out their spare bedroom. This allowance doesn’t kick in until the new tax year starts in April 2017 though, so any earnings up until now should be declared and tax paid.
Not a lot will happen for the next three weeks until the 31st January filing deadline passes, but after then expect to hear of letters from HMRC dropping onto doormats across the country.
If you think that you owe more tax than you’ve currently declared it’s not too late to act, you can still file your earnings before the 31st of January and pay any tax owing to avoid the possibility of fines or worse.