HMRC's plan to use "web robot" software to trawl the internet for tax cheats has been slammed by privacy campaigners.

Using the software, HMRC said earlier this week that it could pinpoint more accurately people who have failed to pay the right tax.

The software, used with the department’s Connect computer system, also helps find people who are commercially trading without telling HMRC - including those selling goods on eBay, Amazon and other trading sites.

Other "areas of interest" for HMRC are home tutors, fitness instructors, life coaches and plumbers.

HMRC says Connect alerts it to previously "invisible tax evasion" by "shining a light" onto previously hidden relationships, uncovering anomalies between such elements as bank interest, property income and "lifestyle indicators".

But the plan hasn't impressed privacy campaigners. Big Brother Watch director Daniel Hamilton told website TechEye: "There's an old adage which says the only thing in life you can be sure of is death and taxes - but this development is truly astonishing.

"For HM Revenue & Customs to be deploying web bots in order to snoop on business owners is outrageous. HMRC should focus on tried and tested methods to target criminals rather than conducting covert surveillance on UK businesses."

Graham Cluley, senior technology consultant at Sophos, added: "There will undoubtedly be some who will feel concerned about how the HMRC's data-trawling could open up issues of privacy. It would be good to hear more information about what they will do with the data that they don't feel is relevant to any cases they are pursuing."

Connect is based on a system called NetReveal from BAE Systems' IT security subsidiary Detica. According to an HMRC report in 2009, the system uncovered VAT repayment fraud worth around £330 million in its first year of use. 

Mike Wells, HMRC director of risk and Intelligence, said: “We want to make sure HMRC listens to as many informed views as possible for our future campaigns. We want the views and experience of people and organisations outside the department to play a fuller part in the campaigns that we design for customers."

He added: “We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily.”