Tax cheats are being caught out through boasting on Twitter, Facebook, Instagram or LinkedIn according to financial experts.
Accountancy and business adviser Whitley Stimpson has warned the tax man, banks and insurance companies are using social media to investigate suspected fraudulent claims.
And those who use the sites to post statuses, pictures and videos boasting about expensive holidays and the like could come unstuck over their taxes because of it.
“Firstly, individuals and companies should not be trying to mislead the tax authorities,” said accountancy expert Stuart Haigh, director of Whitley Simpson.
“Secondly, there is generally no need to do so. Apart from the fact that it is against the law there is plenty of advice through companies such as ours that know how to minimise tax payments and to take advantage of relief schemes.
“Social media is a powerful method of communication and it works both ways. Those who boast about their expensive holidays or high lifestyle are being tracked by the tax man and insurance companies to look at fraudulent claims.”
News that social media is being used by tax authorities, insurance companies and banks to profile customers is likely to causing some concern, but the reality is that through a new tool called “Connect” people who have underpaid taxes are being flagged up.
“If someone has paid a suspiciously low sum of tax and then is splashed all over Facebook or Twitter living the high life the tax officers will be investigating in a flash,” warned Mr Haigh.
Tax dodgers who lie to HMRC during an investigation face paying penalties of 100 per cent of the tax due – double the original sum they were meant to pay.
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