HMRC to Use AI from British Tech Firm to Spot Fraud and Tax Return Errors
Britain's tax authority HMRC said it will deploy AI from a British technology firm to spot fraud and errors in tax returns. The deal marks another example of artificial intelligence rapidly entering public finance operations.
The UK's revenue agency, HMRC, said it has signed a contract with a London-based British AI firm to flag potential fraud and error patterns in tax returns. The system will train machine-learning models on historical tax data and produce anomaly alerts that help inspectors prioritise cases.
Speaking to the BBC, HMRC officials said the agency faces an annual tax gap of about £36 billion and that conventional auditing alone is no longer sufficient. They stressed that the AI only generates alerts, with human inspectors retaining final decision-making authority. Individual taxpayer data will be processed under privacy rules.
The initiative is seen as the latest example of public agencies integrating AI into operations. The UK government updated its national AI strategy last year. Critics say oversight frameworks must be strengthened to address error rates and algorithmic bias risks in automated decision processes.
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