By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData Collective
  • Analytics
    AnalyticsShow More
    construction analytics
    5 Benefits of Analytics to Manage Commercial Construction
    5 Min Read
    benefits of data analytics for financial industry
    Fascinating Changes Data Analytics Brings to Finance
    7 Min Read
    analyzing big data for its quality and value
    Use this Strategic Approach to Maximize Your Data’s Value
    6 Min Read
    data-driven seo for product pages
    6 Tips for Using Data Analytics for Product Page SEO
    11 Min Read
    big data analytics in business
    5 Ways to Utilize Data Analytics to Grow Your Business
    6 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-23 SmartData Collective. All Rights Reserved.
Reading: Here’s How The UK Government Is Using Big Data For Tax Collection
Share
Notification Show More
Latest News
cloud-centric companies using network relocation
Cloud-Centric Companies Discover Benefits & Pitfalls of Network Relocation
Cloud Computing
construction analytics
5 Benefits of Analytics to Manage Commercial Construction
Analytics
database compliance guide
Four Strategies For Effective Database Compliance
Data Management
Digital Security From Weaponized AI
Fortifying Enterprise Digital Security Against Hackers Weaponizing AI
Security
DevOps on cloud
Optimizing Cost with DevOps on the Cloud
Development
Aa
SmartData Collective
Aa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > Big Data > Data Mining > Here’s How The UK Government Is Using Big Data For Tax Collection
Big DataData MiningExclusive

Here’s How The UK Government Is Using Big Data For Tax Collection

Diana Hope
Last updated: 2018/06/13 at 9:56 PM
Diana Hope
6 Min Read
big data for tax collection
Shutterstock Licensed Photo - By mei yanotai
SHARE
- Advertisement -

Governments around the world are stepping up their use of big data for tax. They are depending on it more heavily than ever to ensure compliance and eliminate waste. The UK government has recently begun using big data for tax policies.

Contents
Can Big Data Really Help With Tax Compliance?So how is the UK Government planning to use big data?Big Data is Playing an Important Role in Fighting Tax Fraud

Can Big Data Really Help With Tax Compliance?

A couple of years ago, the United States Internal Revenue Service admitted that it is using big data to stop tax cheats. Among the strategies they employ include data mining social media content for evidence that people are living a more affluent lifestyle than their tax filings suggest should be possible. They believe social media data mining and other big data strategies are key to cutting the $300 billion in lost taxes every year.

- Advertisement -

The UK tax authorities seem to be following suit. Tax Evasion and Avoidance collectively cost the UK £6.9 billion every year. Increasing public pressure over large companies evading tax, especially at a time when UK government spending to public services is being cut, is driving the government to act. Therefore, they have sought data on citizens to develop predictive analytics models to conduct better audits.

As well as new laws and more extensive powers for the various government bodies enforcing those laws, the UK government are turning to big data for tax and data analytics to help tackle the problem.

More Read

big data technology has helped improve the state of both the deep web and dark web

What Role Does Big Data Have on the Deep Web?

Use this Strategic Approach to Maximize Your Data’s Value
How Data and Smart Technology Are Helping Hospitalists
Niche Data Tactics to Take Your Business to the Next Level
5 Ways to Utilize Data Analytics to Grow Your Business

Before delving further into the role of big data for tax, it’s important to understand the difference between tax evasion and tax avoidance. It’s outlined here, along with some charts showing how some specific tax avoidance schemes operate in the UK. The basic difference is that tax evasion is a completely illegal practice of either not reporting income or trying to claim for tax deductions that you aren’t legally eligible for. Tax avoidance is more complicated, typically following the letter but not the spirit of the law by moving money between multiple companies and/or trusts to avoid taxation.

So how is the UK Government planning to use big data?

Tax authorities plan to increase the amount of data Her Majesty Revenue and Customs (HMRC) hold and can analyze. They’ve done this by extending their legal right to gather data from merchant service providers and data aggregators, including those that are based outside of the UK. This is a crucial step, as many Tax Avoidance schemes use businesses and trusts based overseas. They also now have the power to hold an online market place liable if a trader sells goods in the UK without paying tax on it.

Secondly, there will be data gathering and monitoring of certain high-risk groups. These include previous tax evasion and avoidance offenders, who will have data gathered on them for several years after they are convicted. Certain affluent individuals will also be monitored as they have been identified as a high-risk group because those with overseas business assets or connections are at a greater risk of offending.

- Advertisement -

Thirdly, as well as building data gathering, monitoring and analysis capabilities, HMRC is also using data and insight to change their own behavior from a reactive organization to a proactive organization. They plan to do this primarily by using insights into human behavior to “nudge” individuals filing their taxes to be honest at key steps in the filing process.

The UK’s activities in this area follow EU rules. While this may change after Brexit, the UK will probably continue to follow EU rules for a transition period and may continue to mirror them after this period to ensure ease of regulatory alignment.

Everything that the EU does in turn follows OECD rules (another reason why Brexit is unlikely to change things significantly in the tax evasion and avoidance arena).  The OECD’s interest is particularly in regulating the digital economy and preventing companies like Facebook and Google from moving profits around to avoid tax.

The data sharing initiatives set in place to prevent these big companies from exploiting loopholes will also help individual member countries like the UK deal with their nationally specific issues, giving them access to international expertise and processes.

Of course, it’s not just big data and analysis that prevents and reduces tax evasion and avoidance. The UK has steadily increased the number of convictions related to tax and made the penalties more severe, including higher fines and longer prison sentences. But without the data and analysis in place, this would be impossible to achieve.

- Advertisement -

Big Data is Playing an Important Role in Fighting Tax Fraud

Tax fraud is a major problem in the United Kingdom these days. Tax authorities are finding new ways to fight against it. Data mining has proven to be one of the most effective strategies in their arsenal, so they are likely to invest in it even more in the months to come.

TAGGED: big data, big data for tax, data mining, government big data, taxes
Diana Hope June 13, 2018
Share this Article
Facebook Twitter Pinterest LinkedIn
Share
- Advertisement -

Follow us on Facebook

Latest News

cloud-centric companies using network relocation
Cloud-Centric Companies Discover Benefits & Pitfalls of Network Relocation
Cloud Computing
construction analytics
5 Benefits of Analytics to Manage Commercial Construction
Analytics
database compliance guide
Four Strategies For Effective Database Compliance
Data Management
Digital Security From Weaponized AI
Fortifying Enterprise Digital Security Against Hackers Weaponizing AI
Security

Stay Connected

1.2k Followers Like
33.7k Followers Follow
222 Followers Pin

You Might also Like

big data technology has helped improve the state of both the deep web and dark web
Big Data

What Role Does Big Data Have on the Deep Web?

8 Min Read
analyzing big data for its quality and value
Big Data

Use this Strategic Approach to Maximize Your Data’s Value

6 Min Read
big data and smart technology in healthcare
Big Data

How Data and Smart Technology Are Helping Hospitalists

8 Min Read
niche data tactics for business success
Big Data

Niche Data Tactics to Take Your Business to the Next Level

6 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

data-driven web design
5 Great Tips for Using Data Analytics for Website UX
Big Data
giveaway chatbots
How To Get An Award Winning Giveaway Bot
Big Data Chatbots Exclusive

Quick Link

  • About
  • Contact
  • Privacy
Follow US

© 2008-23 SmartData Collective. All Rights Reserved.

Removed from reading list

Undo
Go to mobile version
Welcome Back!

Sign in to your account

Lost your password?