HM Revenue and Customs is building a fully digital tax and customs system, using AI to handle routine work connected to tax checks, fraud detection and customer support. The department is working with Microsoft and other tech companies as older systems move onto cloud platforms.
James Mitton, HMRC’s first Chief AI Officer, said, “The aim is to become an agile department supported by a modern IT infrastructure, with innovation driving a better customer experience, helping us close the tax gap and become more efficient in how we operate.”
HMRC wants digital services that help people manage tax obligations without missing deadlines or entering incorrect information. Microsoft UK Stories reported that HMRC has already rolled out Microsoft 365 Copilot to 28,000 staff members, with another expansion planned for 50,000 workers.
Matt Vick, Head of Futures and Innovation in HMRC’s Strategy Function, said, “The department has used AI tools and techniques like Machine Learning and Natural Language Processing for many years… including compliance targeting, document analysis, debt risk prediction, and customer contact handling.”
Vick also said, “It’s clear AI will be foundational to HMRC’s future.”
What Jobs Will AI Handle At HMRC?
One early project involves complaints handling. HMRC is building an AI agent that summarises complaints sent by taxpayers and helps advisers identify missing information before replying to customers.
Dave Johnson, one of the senior leaders working on HMRC’s digital programme, said AI systems will create “smarter, more intuitive customer journeys”, helping taxpayers avoid data entry mistakes, missed deadlines and accidental non compliance.
Johnson said, “Taxpayers aren’t always aware of their obligations and unknowingly miss deadlines.”
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AI will also help staff working on difficult tax cases involving huge collections of information and documents. Johnson said: “Some of the more complex cases involve vast amounts of data and can take an awful lot of time and resource. Generative AI can summarise that casework information and streamline our compliance activities.”
HMRC said tax review decisions will stay under human supervision. Johnson said: “Any decisions will be reviewed and signed off by a human in the process with the relevant tax expertise.”
How Will AI Help Deal With Fraud And Tax Errors?
Tech company Quantexa announced a £175 million agreement with HMRC lasting 10 years. The project focuses on fraud detection, tax compliance work and data analysis.
Quantexa said the programme will modernise HMRC’s data systems and help staff identify “tax at risk more efficiently. The company also said the work will “protect public funds” and support “governed AI at national scale”.
The system uses Quantexa’s Decision Intelligence Platform to connect fragmented records from different HMRC databases. Quantexa said this creates “a trusted, governed foundation for advanced analytics and the safe deployment of AI at scale to enable augmented and automated decision-making.”
Vishal Marria, founder and chief executive of Quantexa, said, “Governments around the world are facing a common challenge: how to turn complex, fragmented data into confident, timely decisions.”
Marria also said, “By creating context from data and embedding trusted, governed AI, we are helping HMRC improve how public sector organizations make confident, informed decisions. This is a blueprint for how the UK government deploys AI at scale.”
