An ex-shadow home secretary describing a covert plan to let HMRC sell taxpayers’ personal data to private companies as “borderline insane” has alerted other groups to the move, resulting in further condemnation.
Tory MP David Davis, a former minister, told a national newspaper that Treasury officials “clearly have no idea of risks to data” in the digital age, as he says they are currently unable to creditably justify the plan.
“Our forefathers put…checks and balances in place when the information was kept in cardboard files, and data was therefore difficult to appropriate and misuse,” Mr Davis told the Guardian.
“It defies logic that we would remove those restraints at a time when data can be collected by the gigabyte, processed in milliseconds and transported around the world almost instantaneously.”
Despite his concerns prompting Big Brother Watch, the Adam Smith Institute and Richard Murphy, the tax campaigner, to also object to the plan, the paper quoting the MP signalled that the initiative is already underway.
In fact, HM Revenue & Customs has reportedly launched a pilot scheme that has released data about VAT registration to Experian, Equifax and Dun & Bradstreet, although the three firms’ respective websites make no mention of the tie-up with the department.
Tax Research UK, run by Mr Murphy, condemned: “The very same companies who object to filing information on their tax affairs that will ensure they pay the right amount of tax…will now be able to buy information on the tax affairs of people who do just that. You really could not make up such staggering hypocrisy from both big business and HMRC.”
The Revenue’s tie-up with the three companies has its roots in Autumn Statement 2013, in which the government said it would “work on” proposals to release VAT registration data.
At that time, the government said it would be “announcing decisions” on any release of VAT registration data in “early 2014,” however it seems a paragraph in the March Budget has been the only notification that taxpayers have had.
Specifically, in the 120-page Budget report, the Treasury says: “The government will legislate to provide for a controlled release of non-financial VAT registration data for specific purposes (principally credit scoring) and to a small number of qualified parties (like credit reference agencies)
At chapter 2.210, under 'Tax compliance and administration,' the Treasury adds: “[The government] will continue to explore options for the public release of a limited subset of VAT registration data as open data.”
Tim Worstall of the Adam Smith Institute reflected: “We should oppose this on the Sir John Cowperthwaite principle. He, famously, would not allow GDP statistics to be collected in Hong Kong on the grounds that some fool would only try to use them to do something.”
Worstall added: “It's not just that fools will use statistics to do something, it's that the entire left political class is trying to use statistics to increase taxation.”
In an attempt to reassure taxpayers, HMRC said this week that "proposals" to make aggregated and "anonymised" data more widely available would be subject to a consultation.
Although the Treasury reportedly says the initiative is still going ahead, the Revenue stressed that any “specific measures” to share anonymised data would be subject to “suitable safeguards” and must demonstrate a “clear public benefit.”