Eagle-eyed tax inspectors have turned to Google for help in spotting taxpayers who may be hiding their true income and living a lifestyle seemingly beyond their means.
HM Revenue & Customs has turned to Google Street View to zoom in on suspected tax cheats to look for evidence that they might be failing to declare their true earnings.
Google Street view is free and accessible online and gives a street-level and bird’s eye view of properties in the UK and overseas.
Enterprising tax inspectors are spying on homes to look for new extensions and improvements.
The software also shows up properties with to let signs in the front gardens to give clues about rental income that landlords may pocket without reporting the true amount on their tax returns.
Other evidence of a wealthy lifestyle includes posh cars parked on the drive.
The information is collated by a £50 million super computer system that links intelligence from Google Street View with data from government agencies, like the Land Registry and local council housing benefit payment records.
Other sources of financial information include letting agents and web sites advertising homes to let and holiday lets at home and abroad.
The tip about HMRC’s spy-in-the-sky comes from tax consultants UHY Hacker Young who uncovered the strategy while representing taxpayers accused of hiding their incomes.
The firm said in one case, HMRC quizzed a taxpayer how they paid for children attending an expensive public school after spotting a sign advertising a school fete in the garden.
The sign had nothing to do with the householder who had to explain to HMRC that neighbours had put it up to prove their innocence in the matter.
Roy Maugham, a tax partner at the firm, said: “HMRC works on the premise that huge numbers of people are failing to declare their true incomes on tax returns and is mounting a big effort to recover what is considered lost tax.
“The internet is just one tool HMRC is harnessing to gather intelligence, and Google Street View is seen as a quick and cheap alternative to visiting someone’s home.”
However the strategy has drawbacks. Google Street View is not regularly updated and the online images can relate to previous homeowners because the software does not publish a date the image was taken, which can cause issues for tax investigators.
“These limitations on Google Street View can mean HMRC is relying on out-dated evidence that can trigger serious misassumptions about someone’s standard of living and income, which innocent tax payers have to prove is incorrect,” said Maugham.
HMRC also follows suspected tax evaders on social networking sites, like Twitter and Facebook, to gather lifestyle and income information from their comments to friends.