Making Tax Digital – Big Brother is watching you

HMRC will be collecting your data

In the long run, the new Making Tax Digital system will make life for businesses and HMRC much more streamlined. But - you should be aware - even if you’re not using HMRC services directly, the tax authority can still collect your data through tax advisers’ and MTD software.

HMRC only monitors your online transactions when you’re signed in. However, they can still track your data when you’re offline. For example, let’s say you have a tax adviser. When they sign in on your behalf, HMRC can pick up your personal data. The same applies when an employer pays income tax via PAYE or when Making Tax Digital software is used to record business records.

HMRC is able to collect data on:

– how individuals use their services
– internet connections used
– what computers, phones or devices you use
– what you tell HMRC

When you sign in to one of HMRC’s services, it creates unique identifiers on the browser, application or device being used. HMRC also places a transaction monitoring cookie which it uses to help recognise you and link you to their account.
The information this cookie gives them includes:

– unique identifiers
– browser type and settings
– operating system
– mobile network information including carrier name and phone number
– application version number

HMRC also collects information about the interaction of your apps, software, browsers and devices with their services, including the IP address, date and time and referrer URL of the request.

They collect this information to improve the security of its services by detecting, preventing and responding to all kinds of fraud, abuse, security risks, and technical issues. When they detect crime, they will, of course, share this personal data with third parties such as the Police. They keep the data they’ve collected for six years plus the current year.

If this issue, or any other relating to business or personal finances or taxation, is causing you concern and you need expert advice, do get in touch.

We’re here to help.


This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Please, consult an attorney if you’d like to get advice on your interpretation of this article.

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