People might trigger a tax investigation if their ‘lavish lifestyle’ doesn’t add up to what should be in their bank account
People might not be aware that their social media accounts could be monitored and flagged if authorities notice they’re living a lifestyle that their finances cannot support. The tactic is being used to ensure people are paying the right amount of tax.
Rachel Harris, an accountant and tax expert, warned that people should be careful with their social media brags, as HM Revenue and Customs [HMRC] could easily be “watching your Instagram Stories.” She said: “HMRC do a lot of work behind the scenes to understand who to investigate and when. One of the things that HMRC agents are trained to do is compare your income to your Instagram.
“They’re looking for something called lifestyle inconsistency. If you’re posting online about luxury holidays and a lavish lifestyle, but your declared income doesn’t match up, HMRC then have reason to investigate you.
“They’re trained to spot red flags like frequent travel, designer purchases and photos of property and assets that don’t appear on your tax returns. HMRC combine what you post with the data that they already collect from your bank, your employer and your tax return.”
She added that people “could face an investigation” if the cash to fund this lifestyle doesn’t add up to what you declare.
The tactic isn’t just limited to Instagram – it’s all social media. The Mirror previously reported on a warning issued by tax barrister Andy Wood that HMRC’s improved scrutiny of online behaviour may lead to potential investigations into your finances.
He said: “HMRC has really ramped up its use of technology and data analytics to make sure people are paying the right amount of tax. Public social media posts are now being scrutinised, as they can provide evidence of suspected financial discrepancies.
“HMRC is legally entitled to view and analyse any publicly available information on social media. This includes posts, photos, and videos that may suggest a lifestyle inconsistent with reported income or assets, evidence which can line up other findings and trigger investigations.”
What do I have to declare to HMRC?
People might have to share certain information about their additional income with HMRC. This would be separate from what any employer already provides to the authority or not already included in your Self Assessment if you work for yourself.
This may include money you earn from things like:
- selling things – for example at car boot sales or auctions, or online
- doing casual jobs such as gardening, food delivery or babysitting
- charging other people for using your equipment or tools
- renting out property or part of your home – including for holidays
- creating content online – for example on social media
If you receive £1,000 or less from trading or casual activities between April 6 2025 and April 5 2026, you can use your trading allowance. This means you do not have to report your sales to HMRC.
Use this free GOV.UK online tool to check if you should make a declaration. You can get help if you do not understand something about your tax by contacting HM Revenue and Customs.
