How will the taxman ever know?

There is a question I’ve been asked at dinner parties, in boardrooms and once, memorably, by a man holding a glass of my wine in my own kitchen. It is always delivered the same way: voice slightly lowered, eyebrow slightly raised, as though we are two conspirators finally alone.

“But how will the taxman ever know?”

I want to answer it properly, because the honest answer has changed completely in the last decade, and most people’s instincts are still calibrated to a world that no longer exists.

The world you remember

The question used to be reasonable. Twenty years ago, information stopped at the border. A Swiss bank account was protected by actual criminal law. A tax authority wanting foreign information had to know precisely what to ask for, ask nicely through diplomatic channels, and wait. The system relied almost entirely on taxpayers volunteering the truth, which worked about as well as you’d expect.

That world produced a whole genre of confident dinner-party wisdom. It is all now wrong.

The world you’re in

Today, your bank in Jersey, your broker in Zurich and your fund administrator in Mauritius are all legally obliged to establish where you are tax resident and to report your balances and income to their own tax authority, which forwards it to SARS. Automatically. Every year. This is the Common Reporting Standard, and in 2024 it moved information on more than 171 million financial accounts, covering nearly EUR 13 trillion, between 116 countries. SARS has been receiving this feed since 2017. That undisclosed account doesn’t have a secret; it has a filing history.

Thought crypto was the loophole? The Crypto-Asset Reporting Framework is the CRS for digital assets, and South Africa switched it on in March this year. Local providers file their first returns in 2027, international exchanges begin that September, and SARS has in any event been collecting data from South African exchanges, and writing polite letters to crypto holders, for years.

Thought property was safe? In December 2025, South Africa joined 25 other countries in a new OECD framework to automatically exchange information on immovable property: ownership, values, transaction history, even rental income. The London flat is scheduled to introduce itself to SARS around 2029.

Add the rest of the machinery: exchange of information articles in nearly 80 double tax treaties; information exchange agreements with the classic secrecy jurisdictions, signed under duress after 2008; a 150-country mutual assistance convention that permits not only exchange but joint audits and, cheerfully, cross-border debt collection; mandatory disclosure rules in South Africa and Europe under which advisers must report clever structures to the authorities, sometimes before implementation; beneficial ownership registers connecting every company and trust to an actual human; and the occasional 12-million-document leak, which nobody plans for and everybody mines.

The part that should really change your thinking

For years, the quiet consolation was capacity. Fine, the data arrives, but who on earth reads it?

Machines read it. Tax authorities turned out to be enthusiastic adopters of machine learning, and the modern revenue authority is less a filing cabinet than a matching engine. SARS now auto-assesses millions of taxpayers directly from third-party data: it doesn’t ask what you earned, it tells you. Its audit selection is algorithmic. HMRC’s Connect system has been cross-referencing dozens of data sources for over a decade. The bottleneck between “the data exists” and “someone noticed” has quietly disappeared.

And the authorities themselves now cooperate like colleagues rather than correspondents: real-time intelligence sharing through networks like JITSIC, joint task forces, simultaneous audits. The old game relied on each country seeing only its own slice of a structure. Increasingly they see the whole picture, together, on purpose.

So, the answer

How will the taxman ever know? He knows. Or he will, on a published timetable, delivered by systems that neither sleep nor forget, read by software that cross-checks it against your return before a human is involved.

If your affairs are fully disclosed, none of this should cost you a minute of sleep; transparency only threatens positions that depended on nobody looking. If they aren’t fully disclosed, then the one valuable thing you still own is time. South Africa’s voluntary disclosure programme allows taxpayers to regularise before SARS comes knocking, typically with substantial relief from penalties and prosecution. The operative word is voluntary, and the window for a disclosure to count as voluntary closes the moment the exchanged data lands on your file or the audit letter lands in your inbox.

The information asymmetry that once made “they’ll never know” feel safe has fully inverted. These days, the taxman frequently knows before you’ve filed.

To the man in my kitchen, then, a considered professional answer: put down my wine, and call me on Monday.

If any of this is uncomfortably relevant to you or a client, speak to us about regularisation before the timetable does the talking.