
Are you aware HMRC is using AI to catch tax evasion, and plans to use a lot more of it in the future? What do you think about that?
A mate of mine runs a fairly large construction business with around 50 staff. A couple of years ago HMRC investigated him, saying he hadn't paid the correct amount of tax over the previous five years. What surprised me was the amount of information they had collected about him. Cars he'd owned over the years, travel, online purchases, bank and credit card transactions, tons of information involving his ex-wife, current wife and family.
I was reading an article about some other guys investigated by HMRC and it turns out they're already using AI and data analytics for compliance, and are expanding it quite significantly. They are testing private-sector AI systems aimed at identifying tax evasion, making greater use of third-party data from banks and other places.
HMRC already has access to huge amounts of financial and other data, AI seems like an obvious way of cross-referencing it and flagging people whose declared income doesn't make sense compared with their spending, assets and business activity.
It made me wonder if people actually realize this is happening and what do they think about it.