Big Brother makes the connection
I’ve been reading that a new super-computer system about to be fully deployed by Her Majesty’s Revenue and Customs has been christened ‘Connect’.
The name implies a sort of benign relationship between citizens and the state.
The reality however is a surveillance package designed to uncover tax avoidance by garnering info from a spectrum of government, corporate and commercial sources.
The aim is to create a profile for each of us as taxpayers, rather than rely on what we put in our tax returns. Any significant differences are then flagged up and could prompt an investigation.
‘Connect’ has been under development for some time. The estimated cost is around £100 million although it’s claimed that a similar amount was previously written off as abortive work.
Whatever the truth, HMRC is now putting their new kit to use. Last month 10,000 individuals who submitted tax returns for 2014/15 received letters regarding savings interest they hadn’t declared.
That data came from banks and financial institutions and was used to cross-check information on tax returns.
Although it may sound intrusive, officials point out that the Connect system does no more than examine our so-called digital footprints to perform the kind of checks already done manually – and they’re extensive.
HMRC has the power to find out what you get paid by an employer, including casual and ad-hoc work. This would include info on company benefits.
They can also find out how much council tax you’ve paid, any relevant VAT registration along with Visa and Mastercard payment transactions.
If you purchased land or property, HMRC will be able to get details from the Land Registry. An added element is that a calculation is made on whether you’re able to afford the property based on the level of income you’ve declared.
This information also helps to determine if properties are being rented out and if tax is paid on income.
The same kind of background check is available via the DVLA regarding vehicles bought or leased. In some instances it’s claimed that an investigation can verify whether a cash purchase was involved.
HMRC has recently been able to get financial information from British overseas territories like the Channel Islands. This year, the reach extends to banks in more than 60 countries. Connect is already proving useful in unravelling links between UK and overseas accounts.
Just to be thorough, tax authorities also monitor marketplace websites like eBay and Gumtree. This enables them to identify regular traders who fail to declare income.
But as you’d expect, the super-computer’s biggest attribute is the ability to simultaneously scan terabytes of social media account information from Twitter, Facebook and Instagram to track what we share about spending and holidays – and which could reveal if we have more money than we’re letting on.
You would think that all this is sufficient to claw back unpaid tax, but the new Investigatory Powers Act, dubbed the 'Snoopers Charter' will soon allow HMRC to also access our internet and telecoms accounts.
Big Brother is about to make the connection and we’re paying for the call.
Not quite making a splash yet
I felt a little out of place among all the whoops and air-fisting that greeted last week’s news about the Swansea Bay tidal lagoon.
What needs to be remembered, in my opinion, is that the lagoon is essentially a green energy solution in search of an appropriate site and Swansea fits the bill by dint of tidal geography.
As such, it’s advisable to keep a sense of perspective and avoid assigning a level of regional economic benefit to the project which is as unproven as the overall design concept.
The general positive thrust of Charles Hendry’s review report had been widely tipped beforehand. It was the details that we needed to see.
He did not disappoint in his assertion that there is a very strong case for a relatively small-scale pathfinder project. More important was his urging of ministers to adopt a no-regrets approach.
In other words, the scheme carries risks but risks worth taking if a step-change in UK renewable energy production is to be realised.
There is no such thing as a capital project that comes in anywhere near the original estimate. Hence the report reference to the need for the lagoon company to “secure a delivery partner with a corporate track record in major energy or infrastructure projects.”
This will resonate with those who hold the purse-strings in both Whitehall and Wales.
I suspect the next stages will be just as fraught as those experienced to date. Some clear thinking is needed, not just in terms of signing up to subsidies but understanding the long-term environmental implications.
Just as important is long-term consensual political support. While opportunities will no doubt arise in future to slam each other over ‘costly mistakes’, the necessity now remains one of leaving out the partisan stuff.