Exclusive: HMRC extends big data system to tackle corporation tax evaders

HM Revenue and Customs (HMRC) is extending its big data IT system as part of its efforts to clamp down on corporation tax evaders, V3 has learnt.

In December last year, chancellor George Osborne said HMRC would be the only government department to be given increased funding, and this was in order to help chase down companies evading corporation tax.

This came as headlines focused on Starbucks, Amazon and Google for not paying their fair share of corporation tax.

Now, in an exclusive interview with V3, HMRC IT director and acting chief information officer Mark Hall, said the department's risk and intelligence IT system, Connect, is currently being upgraded to help chase down such companies.

Connect, which analyses and cross-matches billions of taxpayers' records employment details and self-assessment records, will be extended further to include more data sources, said Hall.

The Connect system was introduced by HMRC in 2010, after being designed by defence contractor BAE Systems at a cost of £45m.

The government said in September the system had already helped HMRC generate £1.4bn in extra tax yield by clamping down on tax evaders and by systematically identifying those having difficulties paying taxes.

Now, Hall said the system is being given "extra data feeds" around business history and behaviour to further increase tax yield from tax evaders, specifically those evading cooperation tax.

"Our current business strategy is about increasing yield, bringing in more tax and providing a better experience to the customer while doing this," said Hall.

"We have already built a lot into the Connect system but we want it extended with more data feeds. We also are looking at moving upstream with the system, so instead of analysis happening after the event, we will embed risk and analysis as part of the transaction itself."

He also touted the real-time capabilities coming to the system as a notable improvement for users.

"These real-time capabilities will alert those filling out their tax forms if they are doing it wrong. So if they submit a figure that is out of the ordinary, they will be given a warning.

"Also, as taxpayers fill out their self-assessment forms, the system will be able to pre-populate the forms at the same time, like insurance companies do."

Additionally Hall said HMRC is working to make HMRC's digital channels clearer for those subject to corporation tax.

"We are moving to a more modern digital environment. In the area of business tax, we plan to create an online banking type of environment so businesses can see all their taxes in one place," he said.

"Also by using more digital channels, we can reduce the amount of paper we send out. So for instance, tax reminders will be given online. We can also make information on the HMRC website more interactive so it's more informative for people."

Hall is currently the acting chief information officer for HMRC, assuming previous HMRC CIO Phil Pavitt's responsibilities this month in addition to his HMRC IT director role.

Pavitt has now taken up a role with insurance firm Aviva, leading its global transformation programme.

"Now I'm a board member, my role is slightly more strategic. But we've had a strong succession process. I've been deputy CIO for two years now so I've already been doing all the running of IT," said Hall.