HMRC gears up to strengthen its oversight capabilities in a bid to tackle tax evasion, following Labour Party’s pledge to invest in recruiting extra tax inspectors.
HMRC is set to enhance its oversight capabilities as part of a crackdown on tax evasion starting in July. The initiative comes after shadow chancellor Rachel Reeves pledged in April that the Labour Party would invest £555 million to recruit additional tax inspectors. Labour aims to reduce tax evasion and generate an additional £5 billion annually by the end of the next Parliamentary session.
Steven Porter, head of tax disputes and investigations at Pinsent Masons, highlighted that although HMRC excels at collecting data, it hasn’t yet fully harnessed its potential. The HMRC Connect system, developed over seven years at the cost of £80 million, is an advanced tool that scours extensive databanks for connections between individual taxpayers, businesses, income, assets, and transactions.
The system can access a wide array of information, including UK and overseas bank accounts, savings, pensions, investments, Land Registry records, credit/debit card payments, and activity on online platforms like eBay and Airbnb. It also checks records from the DVLA and can scrape public social media accounts to gather lifestyle information and evidence of high expenditure, raising privacy concerns among consumer groups and human rights watchdogs.
In implementing these measures, HMRC aims to leave “no hiding place” for tax evaders, leveraging advanced technology to bolster compliance and enforcement.
