Ministers speaking on behalf of the Whitehall tax agency have cited plans for the organisation to ramp its use of tech to better address both systemic challenges and individual casework
HM Revenue and Customs will expand its use of artificial intelligence in a bid to collect more money owed to the state, as well as to help “identify nascent issues with the tax system”, a minister has claimed.
Six months ago, the department launched an exercise to engage with specialised digital and data companies that could potentially offer “novel and innovative solutions to help close the UK’s near-£50bn annual tax gap.
In comments made just before Christmas, exchequer secretary to the Treasury Dan Tomlinson suggested that this drive for innovation could include “HMRC… expanding its use of AI to help tackle the tax gap”.
This will encompass the use of tech to help address individual cases of underpayment or avoidance, as well as much broader work to better understand systemic challenges.
“HMRC’s expansion includes how they focus their compliance work through new risk-targeting capabilities to identify cases for investigation, improving case selection,” the minister said. “It also means using AI to identify nascent issues with the tax system, so they can act rapidly to prevent them before they grow.”
The tax agency has already laid the groundwork for this expansion, according to Tomlinson, via its previous efforts to engage prospective commercial partners.
“This year, HMRC has also significantly invested in partnering with the private sector to explore the use of novel analytical techniques and data to identify deliberate evasion,” he said.
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The minister, who was answering a written parliamentary question from fellow Labour MP Shaun Davies, added that closing the tax gap is just one of a number of areas in which the department intends to make the most of AI.
“HMRC is harnessing artificial intelligence to deliver a more efficient and professional service for customers,” he said. “They will use new technology as a tool to help them to do their jobs more effectively. Greater use of AI will mean that staff spend less time on admin and more time helping taxpayers. It will also help HMRC better target their action against fraud and evasion, to bring in more money for public services. Artificial intelligence supports some of their processes but never replaces human decision-making and oversight.”
Tomlinson added: “HMRC remains committed to the safe use of these technologies, underpinned by strict data protection, security and ethical standards. In cases where AI is used in a way that could impact customer outcomes, HMRC ensures that results are explainable and that there is always human oversight. This means that even when AI is used to support decision-making, final decisions are always made by experienced, trained case workers.”
In its most annual report, the department revealed that, during the 2024/25 year, it had established a dedicated “landing zone to help us safely exploit” generative AI.
The current financial year has brought the publication of the HMRC Transformation Roadmap, which sets out ambitions for the rest of the decade, including numerous new digital services – as well as “cultural change” across the department.
