By Niamh Tracey | 9 August, 2023

HMRC will use AI to target tax evaders

HMRC plans to increase the use of artificial intelligence and machine learning to target tax evaders and non compliant taxpayers

The latest three-year IT and digital strategy has set out priorities for the tax authority’s £1bn plus annual budget, including investment in artificial intelligence (AI) and improvements to customer services, acknowledging that the ‘existing virtual assistant platform was not able to meet all our customers’ needs’.

The use of AI to detect tax fraud or digital identity to make it easier for taxpayers to engage with HMRC, are seen as key to the importance of ‘getting technology right’ for HMRC as an organisation.

It plans to invest further in automating data insight ‘to improve tax yield and provide simple means to interact with HMRC digitally, delivering a total experience approach for customers, agents and businesses’.

HMRC’s technology team will enable data insight-led decision-making for tax and customs administration through the use of quality, consolidated data with robust controls to govern and manage it. This will be augmented with the ethical use of artificial intelligence and machine learning.

HMRC confirmed that the central IT team was working to ensure ‘we were getting the best out of our technology to improve customer engagement and omnichannel experience’.

The latest 2021-22 annual accounts for HMRC showed that expenditure on IT contracts was split between IT public private partnership contract (PPP) payments of £137.7m with a further £896.5m on IT services and consumables, bringing total costs of £1.03bn.

HMRC has introduced voice-based communication for all taxpayers, driving more than £5m cost avoidance on COVID-19 schemes and improving customer satisfaction scores. HMRC said it was investigating capabilities to scale further across the enterprise.

The Chief Digital and Information Officer’s Group, which is responsible for IT development, is changing the way it is organised internally in HMRC and how it works with taxpayers, businesses and agents.

The tax authority is focusing on giving HMRC teams more control over its digital service offerings to taxpayers, making them easier to adapt and evolve, and base decisions on real-time data. This will also allow HMRC staff to have more influence over how digital services are developed.

 ‘We will be customer-centric by design and collaborate with our teams across the organisation to deliver faster and more efficient services that meet these customers’ needs, at a lower cost to the taxpayer,’ the CDIO report said.

‘By providing ‘evergreen as a service’ platforms, with IT software and hardware that’s always up-to-date, we will enable new solutions and products to be built rapidly, created without a dependency on highly technical niche skills. We are putting teams in the driving seat to make decisions on products. We will become more agile and more impactful to serve our customers’ needs, whilst driving scale and efficiencies.’

Tom Skalycz, chief technology officer (CTO), HMRC, said: ‘We are working closely with policy and operational colleagues across HMRC to build strategic roadmaps for our critical enterprise platforms and co-create capabilities that HMRC needs for the future.

‘We are transforming the way in which we work and collaborate across our internal and external supply chain, to be more agile to business needs while being resilient to macroeconomic and technological change.

‘My team and I are committed to enabling technology as the beating heart of HMRC – Making Tax Digital, administering our taxation and customs regime efficiently, and delivering a seamless experience for our customers and colleagues.’

Source: Croner-i