HMRC ramps up use of AI for tax evasion

19th July 2018

HM Revenue & Customs’ decision to utilise more artificial intelligence in its quest to gather evidence for tax evasion investigations has led to a decline in the number of raids at business premises across the UK.

The number of raids fell overall by 30% within 12 months. HMRC officers raided 471 commercial properties in the 12 months to April 2018, compared with 669 in the previous year, according to figures obtained in a recent Freedom of Information request.

In March, HMRC’s Acting Digital Transformation Director, Brigid McBride, confirmed that the tax authority was keen to use AI to improve departmental efficiencies and ease the complexity of tax investigations.

HMRC has set its department a goal of automating ten million processes by the end of 2018.

“[HMRC now uses] a virtual assistant – called Rita – a very simple robotics technology,” said McBride.

“The pace of change is not slowing, the demands of our customers are growing, and our customers are moving towards self-employment.

“The real challenge is building an organisation that can absorb that change and adapt to it.”

Experts have also attributed the decline to HMRC’s increased use of AI, along with its expansion of the ‘Connect’ computer system, designed to catch tax cheats digitally.

Connect, which launched eight years ago, is designed to sift through vast quantities of data on individuals, with the database expanded upon year-on-year. Algorithms within Connect are also capable of highlighting inconsistencies between tax data submitted by individuals and information held by the Land Registry, as well as credit card statements, offshore accounts and social media.

Steven Porter, Partner at Pinsent Masons, said: “An increasing number of investigations have started as a consequence of Connect and AI.

“It’s much more efficient for an officer to sit at a terminal and pull out information than it is to send around the heavies.”

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