Until recently, an HMRC investigation usually meant one of two things. Either someone, possibly a disgruntled business partner or spurned spouse, had tipped off the taxman or you were unlucky enough to have had your tax return picked at random.

All that changed with the advent of HMRC Connect, an £80m software system designed to join billions of dots to create a picture of who may not be entirely honest when it comes to assessing their tax liabilities.

‘No enquiry is random – today it is based on some kind of anomaly to show this is a high risk case,’ says Dawn Register, partner at BDO. ‘We have seen a demo of Connect and it is extremely sophisticated. It is a huge sorting machine [making connections between] Paypal, credit cards, etc. Previously things were not connected.’

Fiona F