Connect (computer system)

Connect is a social network analysis software data mining computer system developed by HMRC (UK) that cross-references business's and people's tax records with other databases to establish fraudulent or undisclosed (misdirected) activity.

History

HMRC introduced Connect in the summer of 2010; it was not fully functioning. Around 350 HMRC employees are involved with Connect, who work with an analytical compliance environment.Times, 14 September 2012, {{Complete citation needed|date=June 2024}} Connect was developed by BAE Systems Applied Intelligence (former Detica in Surrey) for £45m.{{Cite news |last=Caldwell |first=Kyle |date=10 December 2014 |title=Are you next on the taxman's hitlist? |url=https://www.telegraph.co.uk/finance/personalfinance/tax/11092959/HMRC-targets-Are-you-next-on-the-taxmans-hitlist.html |work=The Daily Telegraph}}{{Cite web |title=Case Study: HMRC Fighting Tax Fraud. |url=http://www.baesystems.com/en/cybersecurity/download-csai/resource/uploadFile/1434557140950 |archive-url=https://web.archive.org/web/20160819231228/http://www.baesystems.com/en/cybersecurity/download-csai/resource/uploadFile/1434557140950 |archive-date=19 August 2016 |website=BAE Systems}}

From September 2016, Connect has interfaced with financial information from British Overseas Territories; these have been known tax havens. From 2017 Connect has interfaced with around sixty other OECD countries.

Sources of information

Connect cross-references information from many other UK government databases, including:

Adverts on the internet e.g. Rightmove and Zoopla
Bank accounts and pensions
Council tax
Credit and debit card transactions, going back four years
Companies House
DVLA
DWP (former Benefits Agency)
eBay and other internet marketplaces
The electoral roll
Gas Safe Register
Insurance companies
Land Registry - for capital gains tax

HMRC also independently looks at Google Earth.

Technology

The system deploys the chi-squared test and Benford's law to look for anomalous tax receipts. The system is operated by the Risk and Intelligence Service (RIS) division of HMRC. The software combines analytic tools (Enterprise Guide) from SAS Institute, which collects the information, and NetReveal from BAE Systems AI, which collates it into meaningful information.

It deploys predictive analytics similar to credit scoring, and has dynamic benchmarking. It looks for correlation of income with lifestyle, by comparing with multivariate statistical models; outliers from expected variance will be investigated.

=Definition of data=

Undeclared work is plotted on mapping software, allowing undeclared work to be seen at a street by street level.{{Cite web |last=Rigney |first=Paul |date=November 2016 |title=The all seeing eye – an HMRC success story? |url=https://www.ifa.org.uk/media/653935/Tax-HMRC-Connect-system.pdf |website=Institute of Financial Accountants}}

Purpose

Connect looks for income disparities, often caused by undeclared income. If someone drives an expensive car, but does not have the income to run one or afford one, Connect can discover this.

References

External links

[https://www.telegraph.co.uk/finance/personalfinance/tax/11697816/What-does-the-taxman-know-about-you-your-finances-and-your-lifestyle.html Telegraph: "Connect computer system" (June 2015)]
[https://hmrcdigital.blog.gov.uk/ HMRC Digital blog]
[https://support.sas.com/documentation/onlinedoc/guide/tut42/en/menu.htm SAS Enterprise Guide]
[http://www.baesystems.com/en-uk/capability/financial-crime BAE Systems.com: Financial Crime]

Category:BAE Systems

Category:Big data products

Category:Computer-related introductions in 2010

Category:Corruption in the United Kingdom

Category:Data analysis software

Category:Fraud in the United Kingdom

Category:Geodemographic databases

Category:Geographical databases in the United Kingdom

Category:Government databases in the United Kingdom

Category:HM Revenue and Customs

Category:Informal economy

Category:Postcodes in the United Kingdom