HMRC Sources of Information
It is common for SI investigations to start as a direct result of information received by HMRC.
Below are some of the more common sources of information available to HMRC:
CONNECT data and risk analysis system – HMRC’s latest software enables complex searches and data crawling to target potential under declarations of tax.
Informers - include ex-spouses and ex-employees who often have privileged information and are a key source to HMRC.
Financial institutions - by law, institutions such as banks are required to pass on information relating to cash and income from investments and deposits.
Overseas tax authorities - formal Exchanges of Information have aided and facilitated an increase in intelligence on tax evasion, most specifically from the US and the EU. In more recent years these exchanges have been extended to offshore centres such as Liechtenstein, Jersey and Guernsey and even Switzerland, something that 10 years ago seemed almost an impossibility.
Government departments & local authorities – all departments for example the Land Registry, VAT Offices work much closer together and frequently exchange information.
Other sources - if you spend your undisclosed income you are at risk of getting caught. HMRC also has sources that give lifestyle information. For example private plane and classic car owner lists are used, as are customer records for swimming pool builders and yacht makers.
HMRC also received a list of all Corgi registered individuals. It was not too difficult to then match them to the individual’s tax records and to see who is declaring an honest living.
There have even been cases of HMRC tracking movements in and out of the country with information supplied by local airports.
Therefore, if you have done something wrong it is now quite possible, that at some time in the future, you will get caught.