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What does HMRC know about you?

Thursday, January 18, 2024
AlisonWoodcraft

HMRC doesn’t just look at your tax return and assume everything adds up. They have access to an abundance of resources to help them paint the full picture and join up all the dots, being very careful not to miss a thing… 

We bet that lots of our readers will be surprised to know some of the following methods used by HMRC to gather its information: 

 

  • The Internet

Easy to access and filled with information, HMRC will take to the world wide web to uncover additional information. That could be from something as easily accessible as social media exposure – does the lavish lifestyle being shared align with the income being declared? Any disparities could lead to an investigation. 

 

  • Your Spending 

HMRC also likes to take a close look at any spending. Does the new sports car equate to the earnings declared? Are the first-class flights something that could be afforded by someone declaring a modest income? 

 

  • Informants 

It may sound a bit CID rather than HMRC, but informants are also used to uncover fraud. 

 

  • Random Spot Checks 

And don’t forget, HMRC is well within its rights to carry out random spot checks to ensure the validity and honesty of any submission.  

 

HMRC uses a clever system called ‘Connect’ which gathers data from various sources to check compatibility with tax records. Where issues arise, HMRC can then conduct further compliance checks including the comparison of information from property transactions, bank accounts, credit cards, insurance providers, finance agreements and more.  

Here’s the really important bit to be aware of…. 

Penalties for intentional under-declarations can be up to 100% of the tax return amount (your worst-case scenario tax bill just doubled) or up to 200% for offshore income. By voluntarily disclosing any under-declarations you could receive a reduced fine, but that’s quite a gamble! 

So, when it comes to your taxes, there really is only one way to do them… the right way. That’s where we come in… We bet we can save you money, legitimately, and still submit your tax returns exactly as HMRC would want to receive them. Put our tax gurus to the test and contact Ellacott Morris today.  

If your Plan B is to lay awake at night any worry about your tax return, then you really need to pick up the phone - 01255 425059 – we’re here to help!  


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