05 Aug HMRC’s Connect software
HMRC’s Connect software is a data matching tool that enables HMRC to cross check one billion pieces of data from HMRC records and third party data to identify links between people, organisations, assets and income in a matter of seconds. The software has been under development since 2008. HMRC has a team of some 150 data analysts that use modelling techniques to identify a particular type of taxpayer or business sector where anomalies are common.
This in turn leads to the establishment of a taskforce team to focus on this area. HMRC taskforces are comprised of multiple teams from across HMRC including special investigations, local compliance and criminal investigation units for targeting specific sectors and locations where there is a high risk of tax evasion. The taskforces uses the Connect software to help uncover business areas where tax evasion is common place as well as to target specific businesses.
Connect led enquiries have generated over £3bn in additional tax revenue to date. Connect analyses 30 different databases in total, which include bank accounts, tax returns, land registry, credit card sales, Companies House and informants.
Once HMRC have identified tax evaders they have a variety of tools including financial penalties, civil litigation and criminal prosecution at their disposal.