26/02/2024
🔍 In the UK, HMRC is on a mission to chase down the estimated £35.8bn of theoretical tax liabilities.
Meet Connect, the tool HMRC hopes will help accomplish its mission. Developed with BAE Systems, it was introduced in 2010. At the time, HMRC said it cost £80m to implement, but reports estimate the cost to be closer to £100m. Throughout the years, HMRC has been reluctant to share details about the project.
Estimates suggest that over 80% of HMRC's investigations now stem from leads generated by Connect.
📊 The impact? Already by 2014, HMRC reported that Connect had secured over £3bn of additional tax revenue.
Under the hood, Connect has two distinct parts:
Analytical compliance environment (ACE) - allows analysts to manipulate, analyse, and profile data. Tax credit data is integrated into the ACE environment and cross-referenced in real-time with claims from both HMRC and third-party sources
Integrated compliance environment (ICE) - a visualisation tool showcasing the collected data and facilitating a comprehensive risk assessment.
💡But here's the fact that should get all of our attention: Connect uses over 30 different databases - and HMRC has yet to disclose all the sources of information.
These databases include tax returns, bank accounts, credit and debit card accounts, other government agencies, insurance companies, and even flight sales and passenger information.
This Is Money reported last year that the system holds 55 billion items of data.
Yet, while Connect pieces data from various sources, its credibility has raised questions. Social media data, for instance, can sometimes skew perceptions of taxpayers' affairs.
For taxpayers, navigating a tax investigation can be a taxing ordeal. The cost is more than just financial. The emotional impact of an invasive and often drawn-out inquiry can be devastating.
Compared to a sophisticated tool like Connect, an Excel spreadsheet of your day count won’t cut it. Globally mobile people need to leverage the best technology and partner with the right tax advisors.
With Daysium, you’ll have the tools to construct a body of digital evidence that stands up to scrutiny. You’ll confidently state, “There’s nothing to see here; everything is in order”.
🤝 Get in touch and join our waitlist.
