Tax Expert Urges Vigilance over HMRC Supercomputer
Local tax expert, Steve Maggs, is urging taxpayers to be vigilant over their accuracy when completing Self Assessment tax returns due to HMRC’s ‘Connect’ supercomputer.
With the 31st January deadline for online tax returns looming, it serves as a cautious reminder that HMRC continue to fully deploy their ever developing ‘Connect’ supercomputer system to verify returns. HMRC can now easily find inaccuracies in people’s tax returns, as ‘Connect’ has thecapability to gather information from sources such as the Land Registry, banks, eBay, card transactions, social media accounts and, since September 2016, offshore institutions in British overseas territories.
Steve Maggs, Tax Partner at Robinson Reed Layton, the independent firm of Chartered Accountants and Chartered Tax Advisers based in Cornwall, explained: “It’s been well publicised that HMRC have been making a sustained effort to reduce losses from tax evasion and other illegal activities, which is welcomed given that the majority of the ‘Tax Gap’ can be attributed to illegal activity such as tax evasion. ‘Connect’ enables HMRC to significantly extend their efforts to verify tax returns effectively and efficiently by identifying errors on returns and identifying undeclared income and gains.”
Some of HMRC’s methods have, however, drawn criticism. Most recently, in December, the targeting of 10,000 individuals regarding their declared bank interest on their 2014/15 SelfAssessment tax return was criticised due to HMRC’s refusal to clarify what had been overlooked or how they had come to their conclusion.
Steve commented: “The ‘Connect’ system has now been used by HMRC since 2010, but its capability is continually being developed. The data collected by the system is vast and doesn’t only relate to income and capital disposals, but also lifestyle such as travel movements.
“Given the assistance this provides HMRC, it is more important than ever that taxpayers seek advice from a Chartered Tax Advisor (CTA) to mitigate the risk of errors and/or omissions being made. It is also vitally important that taxpayers subject to an HMRC investigation seek advice from a Chartered Tax Advisor”.
For further information on Robinson Reed Layton, please visit their website http://www.rrlcornwall.co.uk/