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Her Majesty's 'Web Robot' Catches Tax Dodgers

People in the UK are using the Internet to augment their incomes; as many as 70,000 people earn a quarter of their income by trading on eBay alone. But do they report these earnings for taxation?

Enter the 250,000 'web robot' developed by Her Majesty's Revenue and Customs (HMRC) to search out the high-volume traders on sites like eBay. HMRC collected more than 1bn in Value Added Tax (VAT) revenues on e-commerce sales in the 2005-6 tax year. Sales over the internet tripled to 18.1bn between 2002 to 2004 and are expected to hit nearly 60bn a year by April 2010.

It is expected that the 'web robot' - or search agent - will net the government an additional 1m in income this year alone. Sir John Bourn, head of the NAO, said:

"I find it encouraging that HM Revenue and Customs is well positioned to manage the current risks to VAT from electronic commerce. With internet sales set to mushroom in the next few years, the Department faces a challenge to ensure it stays ahead of the game.

"Some businesses are inventive at side-stepping VAT, and the Department must be equally innovative in guaranteeing the Exchequer gets the revenue it is due."

The idea of software intelligent agent that searches through the Internet has long simmered in the imagination of science fiction writers. In his 1965 novel The Age of the Pussyfoot, writer Frederik Pohl wrote about an interests profile which, when completed, would search throughout the myriad of choices available for whatever you wanted.

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