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So, it seems that privacy is a thing of the past?

So, it seems that privacy is a thing of the past?

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03rd Dec 2012 09:37

George Orwell

would not have believed it.

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03rd Dec 2012 09:54

We already have something similar

The income on mortgage application can be cross checked with HMRC.

I'm not wholly against this, so long as it is applied sensibly (which doesn't usually apply to anything that involves HMRC).

Why should taxpayers subsidise tax cheats, especially when the tax cheats can be more competitive on prices and put the tax payers out of business?

Think of it from HMRC's angle. How can they find out who declares all their earnings, and who doesn't? The only way is to compare lifestyle with declared income and they need to do this as efficiently and cheaply as possible.

Does anyone know a better way to identify tax cheats?

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03rd Dec 2012 11:33

Yes

ShirleyM wrote:
Does anyone know a better way to identify tax cheats?

HMG already has a massive amount of information spread through the databases of countless departments. By simply linking these, you could for example:-

1. Cross reference the land registry for owners of multiple properties

2. Cross reference the Council Tax records looking for individuals who live in a property valued at more than their income suggests they can afford, particularly if recently purchased.

3. Check the DMV records of car ownership against stated earnings

The list is endless. Fair enough, there would be a high incidence of false positives - those heavily in debt, inherited property etc but if this was made public it would likely have a deterrent effect.  

 

 

 

 

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03rd Dec 2012 12:08

@Roland

Roland195 wrote:

HMG already has a massive amount of information spread through the databases of countless departments. By simply linking these, you could for example:-

1. Cross reference the land registry for owners of multiple properties

2. Cross reference the Council Tax records looking for individuals who live in a property valued at more than their income suggests they can afford, particularly if recently purchased.

3. Check the DMV records of car ownership against stated earnings

The list is endless. Fair enough, there would be a high incidence of false positives - those heavily in debt, inherited property etc but if this was made public it would likely have a deterrent effect.  

Are you suggesting that the checks should be increased to encompass all the above?

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03rd Dec 2012 13:38

Why not?

ShirleyM wrote:

Roland195 wrote:

HMG already has a massive amount of information spread through the databases of countless departments. By simply linking these, you could for example:-

1. Cross reference the land registry for owners of multiple properties

2. Cross reference the Council Tax records looking for individuals who live in a property valued at more than their income suggests they can afford, particularly if recently purchased.

3. Check the DMV records of car ownership against stated earnings

The list is endless. Fair enough, there would be a high incidence of false positives - those heavily in debt, inherited property etc but if this was made public it would likely have a deterrent effect.  

Are you suggesting that the checks should be increased to encompass all the above?

It's not like it would be any new information - it's already out there (or in there).

Just from the information on record just now you HMG could easily check on properties owned, motor vehicles owned, trips abroad etc. When these items are compared with reported income I would imagine the vast majority of evaders could be exposed (albeit a large number of others in debt etc as mentioned).

 

 

 

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03rd Dec 2012 14:02

A credit report could actually clear the guilty.

Roland195 wrote:
It's not like it would be any new information - it's already out there (or in there).

Just from the information on record just now you HMG could easily check on properties owned, motor vehicles owned, trips abroad etc. When these items are compared with reported income I would imagine the vast majority of evaders could be exposed (albeit a large number of others in debt etc as mentioned).

Certainly it would catch a lot of the naive and ignorant tax evaders that accept unreported cash and leave an electronic trail by using credit cards, banks for their spending.

Those that earn unreported cash and spend that cash anonymously in bars, restaurants, etc. will remain invisible.

Not that this is necessarily a barrier, just that the cleverer evaders will ensure their electronic trails match their provable income in which case a credit report could actually clear the guilty.

We might want to think about the consequences of that one....

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By afairpo
03rd Dec 2012 16:03

Connect or be damned, and all that.

ShirleyM wrote:

Roland195 wrote:

HMG already has a massive amount of information spread through the databases of countless departments. By simply linking these, you could for example:-

1. Cross reference the land registry for owners of multiple properties

2. Cross reference the Council Tax records looking for individuals who live in a property valued at more than their income suggests they can afford, particularly if recently purchased.

3. Check the DMV records of car ownership against stated earnings

The list is endless. Fair enough, there would be a high incidence of false positives - those heavily in debt, inherited property etc but if this was made public it would likely have a deterrent effect.  

Are you suggesting that the checks should be increased to encompass all the above?

They already are - it's called the 'Connect' system. HMRC have recently started using it to cross-reference tax data with data collected by other government departments.

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03rd Dec 2012 10:24

Not a fan of HMRC, but we should give them some latitude...

UK Credit Agencies are covered by the The Consumer Credit Act 1974 and as such are a resource available to public and private organizations with the aim that by maintaining transparency in an individuals credit relationships with various credit suppliers, the overall cost of credit can be reduced.

 Despite a few teething problems, this has been successfully achieved over the 38+ years. The value of the information held by credit reference agencies is such that it would be foolish to bar HMRC from making use of it, my only concern being that Credit Reference agencies should only be utilized as a secondary resource when an investigation is already underway or we will end up with HMRC Fishing trips, which are both an unnecessary intrusion and a waste of time for HMRC, agent and taxpayer alike.

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By Glennzy
03rd Dec 2012 11:47

For me HMRC have missed a huge trick with the whole "self certified" mortgage schemes that were popular in the boom period.

They were basically given to people who had substantial incomes but could not provide evidence of how they derive their incomes.

I am suprised it has taken until now for someone to come up with the idea to check on mortgages obtained in this way.

However in practice I am sure the scheme will not focus on the people who constantly evade their obligations but merely fall as another layer of red tape on Joe Public who are trying to earn a living, and probably increase mortgage arangement fees etc and further limit the avialabliity of bank borrowings to the public.

 

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By nutwood
03rd Dec 2012 12:16

If the Telegraph article is correct

If the wording of the Telegraph article is correct then the proposal is for HMRC to provide details of the declared income of 2m taxpayers to the credit reference agencies and for those agencies to compare that data with any spending data they may hold. 

Given the numbers involved it seems beyond doubt that there is no intention of giving any serious screening to the individuals concerned.  Can this really be legal?

The article also says that HMRC were to announce this on 2 December. Did they?

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03rd Dec 2012 12:38

The only sensible reporting in the Telegraph is the sport

Brian Moore the voice of reason, who would have thought it!

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By Old Greying Accountant
03rd Dec 2012 13:17

The credit checks ...

... will have little effect on those dealing mainly in cash!

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By Old Greying Accountant
03rd Dec 2012 13:42

And Roland195's suggestion ...

...would encompass those dealing mainly in cash!

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03rd Dec 2012 13:52

the real scandal is the way that credit agencies are operated

every request for credit is logged and used to  damage an individuals credit worthiness

the agencies arent bothered about updating a persons report for payments made

data and incorrect data is held far to long, the period in this day and age should be reduced to 3 years

they associate people to properties and often perfectly eligible people are denied credit

this is a much bigger scandal than  phone hacking that affected a few people this potentially affects 10s of millions

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03rd Dec 2012 13:54

Interesting

I'm not quite sold on the Revenue's reasoning on this, although I can see why they're thinking in this sort of direction.

People running things through on credit has (historically at least) usually meant that such people don't have the liquid assets necessary to purchase outright (in which case it wouldn't appear on any credit report.)  In effect these people are paying for the item(s) not on historic earnings, but the promise of future earnings.  I often pass by the ipad section of PC World, see their offer of credit for the ipads and think: if you can't shell out four hundred quid and have to take out a credit plan, then this probably isn't something you should have anyway.

In short: people's credit is more indicative of what they would like their lives and income to look like, rather than what it actually is.

Perhaps I'm being overly cynical or too general.  But this is what I've seen, and it could trip up the Revenue's proposed approach to things.

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03rd Dec 2012 13:58

PS

i recently watched Secret State on C4, based on the book by Chris Mullin the best parliamentary diarist of our time - if the secret services really work like that god help us all 

 

what was it Mottram said  ' Im f******, youre f****** , we are all f****** '

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03rd Dec 2012 14:06

I'm with you @Roland

I would think that any data available, such as that mentioned by you, could and should be used. It is in the public domain anyway (mostly), so good use could be made of it by HMRC.

Anything that creates a fairer, and more level, playing field is to be applauded. It bugs me when cheats gain a benefit over law abiding people.

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03rd Dec 2012 14:33

HMRC have never been very good at rational self-control

ShirleyM wrote:
It bugs me when cheats gain a benefit over law abiding people.

In principle, I agree.

However, without appropriate controls we could find HMRC using the output from such data-matching to accuse innocent taxpayers of evasion.

All common sense left HMRC when the experienced inspectors were made redundant and replaced with call centre operators.

This would have been a valuable and powerful tool to HM Inspectors 10-years ago, when they still retained a strong grounding in the practical and ethical aspects of taxation.

With the current bunch of HMRC call centre drones more focussed on achieving Pacesetter Lean Process guru status than unbiased implementation of UK tax code, this is yet another set of abuses waiting to happen.

In my younger days, I had the greatest of respect for HM Inspectors as they were tough, but fair.

My most recent face-to-face meeting with someone 'claiming' to be an HM Inspector was of a rude and arrogant man on a fishing trip who was unable to even clearly state the statutory basis for his presence there.

I was almost embarrassed to walk rings around him.

...almost...

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03rd Dec 2012 14:21

Do MP's buy their duck houses on credit?

Isn't this again going to cost the ordinary man in the street who maybe fiddles a little, whilst again ignoring the rich and the large corporations who fiddle a lot?

 

 

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03rd Dec 2012 14:34

I agree @frustrated

As pointed out in my first response ... anything that involves HMRC is unlikely to be sensible, and is more likely to be 'pick the easy target' and 'avoid upsetting my mates'.

As the people who have all the power are amongst the biggest 'cheaters', can we hope for anything better?

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03rd Dec 2012 16:53

Wasn't that how Al Capone was sent to Alcatraz

If memory serves me right, that was the only way the Feds could find to send Al Capone to Alcatraz. His expenditure was too large for the declared income on his tax returns.

Now think of all the alleged terrorists, drug dealers etc who might tbe spending more money than they can explain. Would a successful prosecution by HMRC indicate a criminal lifestyle and lead to a confiscation order?

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03rd Dec 2012 19:35

It is a good job ...

...... that all these agencies/departments have whizzo computer systems that hold 100% completely accurate and up to date information that can easily be crossed referenced over multiple platforms - otherwise there could be problems .............

Glad to see that the government are focussing their efforts on the big ticket markets - now that they have sorted the waiters/waitresses to declare their tips.

You never know, they may soon move on to the large number of corporates and very wealthy individuals who pay a vastly disproportionate amount of tax .................

 

 

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03rd Dec 2012 20:38

Not a lot of people know that

Since 1996 the Audit Commission has run a 'data matching' exercise regularly as part of the National Fraud Initiative.

You would be amazed (or maybe not) to find that, for example, claimants for local authority Housing Benefits sometimes provide details of their income on claim forms which fail to disclose  . . . that they have earnings as an employee of a local authority.  Doh!

The data matching exercise flags up these, and other, anomalies for investigation.  The data examined comes from local authorities (including electoral roll data), the NHS, the Home Office, UK Border Agency (immigration and visa data), police, fire and rescue services, student loans company, pension funds, etc.  Further details HERE.

I understand that in 2010/11 the exercise resulted in the identification of fraud, error and overpayments totalling £275m across the UK.

So this HMRC initiative is hardly revolutionary.

David

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04th Dec 2012 14:10

what next

will they tap into loyalty cards  i.e.  tesco nectar and the rest

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04th Dec 2012 14:21

I might be wrong...

carnmores wrote:
what next? will they tap into loyalty cards  i.e.  tesco nectar and the rest

Happy to be called out on this, but I thought government was already data mining supermarket loyalty card data to fill the gap in Census data by unregistered homes.

Obviously the data may be anonymous and therefore of no use to HMRC, but surely we've already crossed the Rubicon here with supermarket loyalty card data?

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By afairpo
05th Dec 2012 17:40

They have been doing it for years
HMRC have been getting loyalty card info for more than a decade - they request it, not anonymised, where they suspect evasion, to get an idea of expenditure.

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By kudlit
01st Aug 2013 04:53

There must be a better way

Privacy has always been a knotty issue. Tax fraud, I can understand the initiative. But now it's getting ridiculous. I mean the government could be spending money better than monitoring mature content usage of its citizens. 

-------

Finance Australia

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