HMRC’s Connect system has become one of the most powerful tools in the fight against tax evasion and error. By drawing information from banks, the Land Registry, online platforms, overseas disclosures and even lifestyle data, it allows HMRC to spot inconsistencies that would once have gone unnoticed.
In the past year alone, Connect was credited with identifying an additional £4.6 billion of tax. This is a significant increase on previous years and shows how deeply it is now embedded in HMRC’s compliance work. It underpins hundreds of thousands of investigations annually, from routine checks to more serious enquiries.
The groups most likely to come under scrutiny are those whose affairs involve multiple sources of income or complex structures. High net worth individuals, property owners and landlords, small businesses, online sellers and those with offshore assets are all in scope. Connect is also adept at comparing lifestyle with reported income, so anyone spending or investing far more than they declare can expect questions to follow.
Many people will not be affected, but anyone whose tax affairs don’t match the data held by HMRC will now find it much harder to go unnoticed. It’s yet another reason to keep accurate and comprehensive financial records.
If your records are not in order, or you are concerned that HMRC might wish to delve deeper into your financial affairs, please get in touch.
