The UK is one of the European leaders in the revolutionary compliance with a reputation for innovation in the field of digital tax compliance. By using common electronic filing of tax information through an online platform, the ever-growing amount of data is gathered by Her Majesty’s Revenue & Customs (HMRC). This allows for greater parts of the tax risk review to be automated.
HMRC’s comprehensive data analytical model, “Connect” system (1), draws on information from countless government and corporate sources to create a comprehensive profile of each taxpayer’s total income. If this profile differs from the information provided by the taxpayer, the account is flagged and could be investigated further.
“Connect” system broadly deals with the information available in various government departments, as well as with the massive electronic footprint left on the Internet. Essentially, this system allows HRMC to analyse not only tax data, but also, for example, information from credit reference agencies and online social-networking platforms can be used to identify both individuals and behaviours that may indicate tax fraud or evasion.
As further steps, HMRC is planning to build a platform for predictive analytics in order to achieve extra depth in terms of thinking about the data and modelling approaches. It is considered to help assess tax risks in a better way, using HMRC’s staff capacity more effectively while decreasing the burden of the compliant taxpayers.
Personal and corporate privacy is of concern due to a great deal of information gathered as part of the tax compliance process. Public trust is critical for UK's data-driven government.
To give the citizens an assurance that the government is guarding the collected information responsibly, an ethical framework for data science in government was published (2). It is mainly based on the key principles of data security, openness, user need and public benefit. In addition to this, HMRC uses the Secure Data Exchange Service (SDES) (3) to transfer securely files to and from HMRC.
Digital communications are also exposed to potential abuses from the private individuals. Phishing emails, man-in-the-middle attacks, identity theft, spearfishing, social engineering, and other forms of cybersecurity breaches are serious risks wherever important information is being transmitted.
The extensive effort to educate taxpayers about the key risks and safeguards of their personal information is not enough to prevent technology-savvy criminals to defraud the honest, taxpaying public. Therefore, the HMRC’s cybersecurity team is pulling out an innovative approach to identify phishing texts that claim to be from HMRC and stopping them from being delivered.
In November 2016, HMRC was the first government department to implement fully the domain-based message authentication, reporting, and conformance (Dmarc) protocol. Dmarc verifies emails to ensure they come from an unpretentious source. HMRC has also saved the public from scammers who create websites that look similar to HMRC's official site and then direct the public to call numbers with expensive costs.
This workshop will not only provide insights into the latest national and international developments in the field of analytics applied by governments, but will also allow for sufficient dialogue amongst participants and presenters alike to share best practices around designing a Tax Risk Management Strategy going forward.
How to manage Global Tax Controversy?
How to use Value Chain Analysis as a risk management tool?
How to Use Tax Technology to stay one step ahead of the tax authorities?
Time: 9.00 AM - 6.30 PM London (GMT)
Venue: De Vere Grand Connaught Rooms, London (UK)
Registration fee: GBP 375 per person (excl. VAT)