HMRC has admitted to using AI to spy on workers’ social media posts as part of a tax crackdown.
The tax authority has been using the technology to look at internet posts that might provide evidence of cheating tax bills, according to a report in The Telegraph.
1
In particular it’s looking for posts about large purchases or expensive holidays that could trigger a red flag if it looks like someone is spending beyond their means.
An HMRC spokesperson has insisted the tools are only being used for social media monitoring in criminal investigations and it won’t affect the average taxpayer.
They said there are “robust safeguards in place” and it’s believed that social media monitoring has been used for a number of years.
But concerns have been raised about whether the technology could be used more widely in future.
HMRC also looks at workers’s financial records, spending habits and tax returns to look for evidence of cheating.
It uses an IT system called Connect to look at financial data for routine tax investigation.
It’s believed HMRC is increasingly relying more on online systems rather than humans to carry out its investigations in a bid to save money.
The taxman has also said its staff will use AI to identify suspected tax evaders and send out “automated nudges” asking them to pay what they owe.
It comes as Chancellor Rachel Reeves is trying to boost public finances to fill a £51billion black hole in the economy.
The Government is trying to avoid raising taxes for working people – but it therefore needs to find new ways to boost the public purse.
Earlier this year, Reeves announced a fresh £1billion clampdown on tax dodgers that would see HMRC given fresh powers to claw back lost money.
Almost £5.5billion was lost to tax evasion in 2022-23, 81% of which was from small businesses.
Then there’s also taxes that remain uncollected due to HMRC being unable to locate the correct data.
The chancellor just days ago approved new rules meaning banks could be forced to share more of their customers’ financial details.
Under the plans, banks will need to ask new and existing customers with savings accounts for their National Insurance numbers from April 2027.
This will make it easier for HMRC to bill savers who have breached their personal savings allowance.
HMRC has said it’s unable to get hold of taxpayer data properly in about a fifth of cases – meaning there could be millions of pounds worth of tax that doesn’t get collected.
Warning over AI use
Some MPs have raised concerns that using AI to gather evidence of potential tax evasion could lead to errors.
They also fear the technology could start to be rolled out more widely by HMRC.
Senior Conservative MP Bob Blackman told The Telegraph: “If they suddenly start taking legal action against individuals based on that, it seems draconian and very challenging – to put it mildly.
“You’ve got to have a check and balance. The risk is that AI gets it wrong and someone is pilloried – it seems a bit strange if they start doing that with AI. Without a human check, you can see there’s going to be a problem.”
Sir John Hayes, a former security minister and chairman of the Common Sense Group of Tory MPs, warned it could lead to another Post Office-type scandal.
“Where confidential or sensitive material is concerned, people need to be assured that human beings with experience, common sense and judgement are making decisions,” he said.
“Automated processes remove human interactions. I would be very concerned that we will end up with a Horizon Post Office-type scandal.”
How do I file a tax return?
TO file a self assessment tax retun, you’ll need to register with HMRC first, which will then issue you with a Unique Taxpayer Reference (UTR).
You must register for self assessment by October 5 if you have to file a tax return and you have not sent one before.
You can do so by visiting www.gov.uk/register-for-self-assessment.
If you’ve previously registered and already have a UTR, you don’t need to go through this step again.
Once you’ve got your UTR, you can sign in via the “Self Assessment tax return” section of HMRC’s website by visiting www.gov.uk/log-in-file-self-assessment-tax-return.
You can then file your self assessment tax return online.
The deadline for sending a return online is January 31 every year.
If you need a paper copy of the main Self Assessment tax return, call HMRC on 03000 200 3610 and request an SA100 form.
The deadline for sending a return using a paper form is October 31 every year.
You need to pay the tax you owe by midnight on January 31 each year.
HMRC accepts your payment on the date you make it, not the date it reaches its account.
File late and HMRC will issue you with a fine.
