Are HMRC Planning to use Drones to Snoop on Taxpayers?

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Are HMRC Planning to use Drones to Snoop on Taxpayers?

An interesting question as HMRC gather more and more information and not as farfetched as it might seem.

In Greece where tax evasion is reportedly as high as 25% the Greek tax authority have been using drones for the last two years with reportedly spectacular results. The drones have been flown over tourist hot spots and for instance have been used to monitor the number of passengers on tourist boats. It is then a simple job for the tax man to compare takings for the day to the actual number of tourists aboard the boat.

In the UK HMRC are developing its own supercomputer called the Connect Computer System but more colloquially as “Snooper Computer”, at reportedly a cost of over £100m. For reasons of its own the development of the system has been spun off into a separate not for profit company (although the accounts show that it pays corporation tax).

‘Snooper Computer’ & HMRC to Gather Data 24/7

The system draws together a huge and ever growing amount of information which HMRC inspectors can interrogate when they are reviewing a taxpayer’s affairs.

In simple terms they can compare the information shown in a tax return with the information gathered as to the taxpayers spending habits.

Information is gathered from government and corporate sources, as well as looking at social media profiles.

HMRC are reported to look at the social media pages of children who may be more free about sharing pictures of foreign holidays or Dad’s new high end car or yacht.

HMRC can use its information gathering powers to obtain and gather information from the Land Registry, banks, peer-to-peer lenders and even platforms like Airbnb to build a picture of an individual’s spending. HMRC has received information from banks and the Land Registry for many years but rather than being lost in a file Connect allows inspectors to drill down into a taxpayer’s affairs more efficiently.

Drones, Human Rights & Data Capture @ HMRC

There is a lot of information for HMRC to gather either from that which is publicly available, or which can be obtained through HMRC’s statutory information powers, but does this include flying a drone over someone’s house, business property or golf club.

The answer seems to be maybe and here the Human Rights Act comes into play. Article 8 provides that “everyone has the right to respect for his private and family life, his home and his correspondence “. Article 8(2) provides a let out where the information is required for a legitimate aim and necessary… for protecting the taxation system. HMRC tells their staff – in order for HMRC to comply with the conditions of article 8(2) any planned activity must be proportionate to the underlying need… to assess proportionality you should consider the nature and degree of interference.

Against the background of Connect it is not beyond the realm of credibility that someone at HMRC is considering how drones may be used.

For more information on how HMRC might be tracking your data as part of a tax investigation please contact a member of our helpful team. Or be sure to read more about HMRC below.

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