It has long been speculated that HM Revenue and Customs (HMRC) is using artificial intelligence (AI) as part of its tax investigations, and it’s now confirmed that this is the case.

The regulatory body is using AI to monitor social media posts as part of its investigations into suspected tax cheats and dodgers. Safeguarding measures are in place to protect data, with HMRC clarifying that it is only being used for criminal investigations.

HMRC is adopting a more technological approach as part of its Digital Transformation roadmap, and they see AI as a very useful tool to help them build a case during investigations and ultimately take a step towards receiving any outstanding debts.

What does the AI help HMRC look for?

As noted above, HMRC is using AI to look at an individual’s social media activity. They hope the AI will help them uncover any discrepancies that they can use in their investigation against an alleged tax evader.

HMRC also looks at individual financial records and spending habits, which they can compare against what they see on social media.

This allows them to build evidence and conclude whether the individual they are investigating has the means to pay their outstanding tax debts.

They do stress that while they are using AI during their tax investigations, it does not replace human decision-making, and all AI activities are overseen by human investigators at HMRC.

How does AI impact HMRC’s processes?

HMRC believes the use of AI streamlines its processes and allows investigations to move at a quicker pace. They also want to help UK taxpayers and they believe AI can help with that.

HMRC is looking to develop tools that help taxpayers file their returns correctly and pay the correct amount of tax. One action they are expected to complete with the help of AI is streamlining information and simplifying their website guidance pages.

With HMRC continuing to push its digital transformation plans, you should expect HMRC’s use of AI to increase in the future as they modernise their services and how they operate.

Have you paid the correct amount of tax?

With HMRC confirming its use of AI in tax investigations, it is important that you have fulfilled your obligations by filing your returns on time and paying any outstanding tax bills.

HMRC is stepping up its measures to combat financial crime and tax evasion, so if you are unsure about any tax you pay, our expert team of tax advisors is here to help.

We can help you analyse your taxes, help you pay any debts and advise you on the best course of action, so you have a clear picture of your finances and current financial position.

For advice and support with all tax concerns, get in touch with our team.