The UK is Leveraging AI to Catch Tax Defaulters

The UK’s tax authority, HM Revenue and Customs (HMRC), has stated that it uses AI to review social media activity as part of its investigations into suspected tax evasion. According to the agency, the technology is not a replacement for human judgment and remains under legal supervision. 

In a public statement, HMRC said that expanding its use of AI will allow staff to spend less time on routine paperwork and more time assisting taxpayers. The technology is also expected to improve fraud detection, helping the government recover more funds for public services. 

Experts acknowledge the potential advantages but also caution about the risks. Chris Etherington, a partner at RSM UK, stated that AI could help the agency gather and organize information about individuals more efficiently. However, he warned of the possibility of mistakes, particularly if false or hacked accounts are involved. He added that human review will still be necessary to make fair and accurate decisions. 

While HMRC has been using AI tools for years, it only became public recently that the system is being applied to monitor the online posts of people suspected of tax fraud in a report by the Daily Telegraph. The agency clarified that this approach is used only in criminal cases and does not involve the general taxpayer population. 

UK government investigators have long checked social media for signs of false benefit claims or undeclared income. One well-known case involved a woman who claimed illness-related benefits but shared online updates about her participation in long-distance races. AI now partially automates this type of monitoring, though human oversight remains in place. 

The adoption of AI does not seem to threaten existing jobs, as the government has announced plans to hire an additional 5,500 compliance officers for HMRC. 

The timing of the disclosure, however, comes as the government faces criticism over the potential collapse of its national AI institute, with the technology secretary considering cutting its funding unless it focuses more on defense-related projects. 

HMRC is also working on other AI-driven projects to make its services easier to use. Etherington noted that the department has already used data analysis software for many years. The current aim appears to be improving the taxpayer experience, including developing tools that help people file accurate returns and avoid costly mistakes. 

Another planned initiative will use AI to help visitors navigate more than 100,000 pages of tax guidance on its website, which many currently find confusing. 

AI is proving to be of great utility to government agencies around the world, as exemplified by the tax authorities in the UK. The quantum computing solutions being developed by numerous companies like D-Wave Quantum Inc. (NYSE: QBTS) could prove to be even more transformative. 

NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS 

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