The taxman could soon be looking at social networking sites to research the lives of taxpayers, according to tax specialists CCH Fee Protection.
The move could see the tax authorities scanning individual's online entries to assess whether there are any undeclared earnings.
HM Revenue & Custom’s Irish counterpart has already started to browse social networking websites. 'Although there have been no disclosed cases yet in the UK, it is just a matter of time before HMRC starts to use this new technique,' Peter Horgan, Managing Director of CCH Fee Protection, believes.
Individuals tempted to inflate their business interests on professional networking websites such as LinkedIn, or talk up their personal wealth by exhibiting their new luxury car or boat on Facebook, should think twice as this could spur investigations by the tax authorities, CCH said.
'Online data like this could lead tax inspectors to make assumptions about your earnings and lifestyle. If this impression doesn’t tally with the income you report to HMRC it is likely that you will get investigated. CCH Fee Protection is already aware that HMRC looks at local newspapers and media databases to build up a profile of individuals it is targeting, so it is inevitable that it will look to the internet as an additional source of information,' Horgan said.
The taxman already uses a wide range of date to drum up new leads, including a 'web robot' which scans auction websites and other data. The NAO has also suggested it could do more.
A spokeswoman for HMRC said: 'We use a number of methods to find out about people who should be paying but are not. The hidden economy deprives the UK economy of vital funding.'
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