HMRC made over 18,000 requests to view phone records and web histories in investigations last year

New data shows that HM Revenue & Customs (HMRC) made 18,263 requests last year to access communications data, such as phone records and web browsing histories, as part of its investigations into taxpayers.

This represents a 59 per cent increase on the number of requests for communications data made by HMRC since 2010, showing that this data is regularly being used by the tax authority as key evidence in establishing whether tax evasion or avoidance has taken place.

HMRC can request to view data held by telecommunications operators and providers. This could include the time, duration and location of any phone call made. It can also request to view the number dialled.

Additionally, HMRC can ask internet providers to provide data on which websites an individual has looked at. Requests for this information are made to the Office for Communications Data Authorisations.

Furlough fraud is likely to lead to more requests for communications data by HMRC. More than 21,000 employees have already made use of HMRC’s hotline for furlough fraud, which was specifically set up for employees to blow the whistle on employers cheating
the furlough scheme.

HMRC’s own internal estimates also show that up to £3.5 billion may have been fraudulently claimed through the furlough scheme.

HMRC is likely to want to investigate as many cases of furlough fraud as possible, with communications data potentially
crucial evidence for HMRC.

By looking at the phone records of employers suspected of committing furlough fraud, HMRC will be able to establish whether employers have been making calls to employees when they were
supposedly on furlough, and it could raise questions if this falls outside of what would be considered a reasonable duration and frequency to contact a furloughed member of staff. It could potentially indicate that an employee was actually working and any furlough scheme claims made were fraudulent.

Communications data is only able to provide the ‘who’, ‘where’, ‘what’ and ‘how’ of a communication and does not provide the context of what was actually said or written.

In order to obtain this information, HMRC has to use more invasive surveillance technology, such as wiretaps to listen into phone calls made by an individual.

HMRC can also film an individual’s house or track their car if they believe a case of serious tax evasion has occurred!

HMRC is likely to be under pressure to increase its yield from compliance activities in the coming year to make up for the huge outlay of public spending during the Coronavirus crisis.

Clients, therefore, need to be extra cautious and diligent in ensuring their tax affairs are in line with HMRC’s requirements.

Tax investigations can be very stressful and costly for those involved. We are specialists in this area and you can protect yourself against the cost of most tax investigations by subscribing to our Tax Investigation Service. To find out more, please contact us.

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