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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Data gathering: Details of power: Bulk information

The data-gathering powers are used by HMRC to gather specific pieces of information about groups of people, for use in risk analysis. Once we have acquired the information in connection with an HMRC function we may use it for any other function, subject to the usual rules.

The large number of people and the need to keep down the cost of administering the tax system mean HMRC cannot check every single tax return in depth. Risk information is therefore essential to HMRC’s compliance checking function. HMRC currently use a range of data from different sources to show where there are risks that the right amount of tax has not been paid.

This information is used in a number of ways.

  • It allows HMRC to target publicity and support where there is a risk tax has been overpaid.
  • It is used to target HMRC’s compliance checks on cases where there is a risk tax has been underpaid, so that overall compliant people see fewer checks.
  • It helps to make sure that HMRC takes the right approach when checking, indicating whether the check should start with a quick phone call or an in-depth investigation.

Bulk information is essential if HMRC is to tell whether one return is more likely than another to be incorrect. The majority of the information for risk assessment comes from tax returns and public sources. However, much of it comes from HMRC’s bulk information powers.

HMRC does need to require organisations to provide information about the people they deal with. Many of the bulk information returns are focussed on collecting information about income paid where tax may need to be deducted at source.

HMRC uses the data-gathering powers to obtain bulk information as a deterrent to non-compliance. The fact that information is shared with HMRC discourages people from concealing sources of income.