At some time during 2010 to 2017, HMRC booted up a piece of fully integrated computer hardware that has likely transformed their ability to unearth tax-dodgers.
During this period a number of data sources were accessed.
The Connect Computer System (CCS) has the ability to gather data from disparate sources and interrogate the information. For example, it can build a picture of an individual’s spending patterns by searching data from banks, VISA and MASTERCARD, DVLA, online marketplaces (eBay etc), Land Registry records, web browsing and email records and other sources.
This data is then compared to the income declared by the individual and the comparison is used to judge the benefit to HMRC of starting a formal investigation to collect underpaid tax.
Using CCS, HMRC can assemble data in seconds that would normally take months to track down.
It is suspected that HMRC are only limited in the actions they can take by headcount. CCS is a supercomputer not a civil servant with a briefcase.
Soon, most of our financial transactions will be recorded electronically – when was the last time you purchased a car or a property with cash? Each one of those transactions, however small, will become a fiscal footprint, all that is needed is hefty computer hardware to sieve through the electronic noise to piece connected data together.
You can take evasive action to stop nefarious types snooping on your private life by taping over your laptop or phone camera lens, but you cannot stop HMRC’s CCS gathering your social media, Land Registry, bank and credit card data to reveal that recent property purchases and unexplained credits to your bank account do not tally with your tax return.