HMRC plans to share taxpayers’ data slammed

There has been strong criticism of government proposals to allow HMRC to share anonymised taxpayers’ personal data with third parties and to charge for its use, with opponents suggesting this raises important confidentiality issues say Harris & Co accountants Northampton.

The plans are outlined in the government’s responses to a consultation held last year, Sharing and Publishing Data for Public Benefit. The government says it now wants to remove the legal restrictions that currently limit HMRC’s ability to share general and aggregate information for public benefit.

Under the Commissioners for Revenue and Customs Act 2005 (CRCA), HMRC is prohibited from sharing information except in very limited circumstances. The CRCA prohibition on disclosure applies to all of HMRC’s information, including non-identifying (general, aggregate or anonymised) information as well as information on identifiable individuals or legal entities.

The consultation looked particularly at the option for HMRC to share VAT registration data more widely than is possible currently. As well as releasing specific data sets, HMRC is looking to release anonymised information to be used for research and analysis purposes beyond HMRC’s functions, and to share general and aggregate information to improve the delivery of public services.

However, the former Conservative minister, David Davis described the plans as ‘borderline insane’. In an interview with the Guardian, Davis said: ‘The officials who drew this up clearly have no idea of the risks to data in an electronic age. 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.’

In its response, HMRC said it accepts that it will need to set in place comprehensive governance, policies and processes, including the evaluation of benefits, risks and costs of a disclosure, before any data is shared or published. This will include ensuring that any public benefit gained from publishing the information will outweigh any benefit from withholding the information.

HMRC further said it is ‘committed to the core principle of taxpayer confidentiality and it is vital that any release of anonymised individual level data has appropriate safeguards in place to allay concerns around the dangers of individual identities being disclosed inadvertently.’