UK to Use Robots to Fight Tax Evaders

June 24, 2011 Taxation in UK

HMRC Tax RobotThe HM Revenue and Customs are set to make a greater use of technology in their fight against tax evasion, by utilizing innovative new software to find information on taxpayers and detect evidence of undeclared incomes.

In a recent announcement the HM Revenue and Customers (HMRC) stated that it will soon employ the use of advanced “web robot” technologies to investigate online marketplaces for evidence of UK taxpayers conducting retail activities and not paying their  tax obligations. The project will also target online classifieds to discover evidence of taxpayers offering private tutoring services without declaring the realized incomes.

The HMRC’s Director of Risk and Intelligence Mike Wells explained the new project, saying that the new “robot” software will work in conjunction with the HMRC’s Connect system, which is used to crosscheck vast amount of data collected about taxpayers. The two systems will comb the internet for information about taxpayers using previously unavailable searching algorithms to discover evidence of taxpayers conducting business online through pseudonyms. The collected data will be sifted and compared to information obtained  from other government departments and from bank records by the Connect system. The entire dataset will be go through a process of matching to annual income declarations.

Mike Wells also said that the collected data will undergo a secondary examination, specifically looking for undeclared evidence of bank interest, incomes from property, purchases of luxury items, recreational travel, or signs of a disproportionately wealthy lifestyle. The system will then seek out any inconsistencies in available data and aim to make further connections between the lapses and available online information.
Photo by firepile