HMRC snatches extra £4.6bn in tax with 1 move | Personal Finance | Finance
HMRC has raised a staggering £4.6 billion in additional taxes through a new system introduced last year. The “big data” scheme in 2024-25 used sources such as bank records and social media to recoup the funds. On average, the Connect database collected £3.4 billion over several years, a Freedom of Information (FOI) request revealed. This represents a 35% increase for the 2024-25 period.
The tax gap—the amount due but not collected—was estimated by HMRC to be £46.8 billion in 2023-24, equivalent to 5.3% of theoretical tax liabilities. Ian Robotham, legal director at law firm Pinsent Masons, which made the FOI request, said the 2024-25 figure was a “reasonably significant” part of the tax gap.
He added: “The fact that HMRC is using big data and the fact that they are recovering, on their own figures, a considerable amount extra by use of [Connect] shows that it is working.”
HMRC said Connect is “not simply a search tool, but a powerful data-networking, analytical and risk tool” that uses multiple sources.
Mr Robotham claimed it “harvests data from . . . banks, financial institutions, online marketplaces, we’ve even seen a suggestion that they include social media information and things like databases of property lettings”.
However, the tax authority did not reveal what the sources are, saying the “information would be of considerable interest to potential wrongdoers – including, but not limited to, serious organised criminals”.
Connect was introduced in 2010 and “builds networks from this data, allowing us to see patterns and links… that would be impossible for the human eye to spot”, HMRC said.
It added: “It is not the sole deciding factor in beginning or deciding the direction of a tax investigation. Other factors are also considered, and human insight always makes the final judgment.”
