HMRC’s plans for AI

Susan Cattell highlights the importance of AI in HMRC’s plans to transform the tax system.

At its 2025 stakeholder conference, one of the HMRC workshops on offer covered ‘Technology driving better outcomes, sooner’ – all about AI and its role in HMRC’s Transformation Roadmap. 

As a starting point HMRC outlined its ‘use cases’ for AI: 

Machine learning: anomaly detection, looking for spurious behaviours and predictive maintenance or tax evasion. 

Deep learning: sophisticated risk modelling, utilising many parameters to create a predictive score. 

Generative AI: synthetic data, model building and intelligent search, call summaries. 

Agentic AI: case management, intelligent automation of processes and including self learning. 

The roadmap gives more detail on what this will mean in practice. 

The strategic approach 

The roadmap sets out some ambitious targets for HMRC customer services: these include that by 2030 HMRC will be ‘a digital-first’ organisation with at least 90% of customer interactions happening online. Currently, the figure is around 76%. 

The use of AI to help deliver the targets is an important feature of the roadmap. Section 6 sets out the future vision for technology, innovation and AI, including a commitment that HMRC will “adopt AI responsibly, applying its established ethical and safety controls, aligning with government AI, technology and accessibility frameworks and HMRC’s Charter standards.“ It also notes the importance of transparency about how AI is being used. 

Specific examples from the roadmap 

• AI-powered digital assistants: HMRC’s digital assistant (Ask HMRC Online) provides digital support to customers viewing HMRC guidance pages. It allows them to ask questions in their own way and at a time that suits them. HMRC will develop and introduce new AI-powered features to help customers more easily navigate services.
• Developing a new AI service for the Online Trade Tariff to provide bespoke support to importers and exporters, helping them to easily understand their obligations from tax year 2027 to 2028 onwards.
• Some customers will continue to need HMRC support using telephony and post, so service standards need to be maintained for these channels. To improve telephony performance HMRC is introducing AI tools for advisers so they can spend less time on administrative tasks.
• Investment in AI to prevent non-compliance and to tackle the tax gap, including: 

• • New risk targeting capabilities to identify cases for investigation, including using AI to identify issues, enabling HMRC to take rapid action.
  • Collaborating with the private sector to bring in and test AI, data science, or other innovative approaches to help improve the way HMRC identifies, understands, and takes action to reduce the tax gap. 
  • Working with the Government Digital Service to explore how to help business and other third parties use gov.uk guidance in their own AI-powered products and services to help to reduce error. 
  • Providing caseworkers with enhanced AI-powered systems, including access to Generative AI systems that could help with case management, for example, by summarising case documents and answering queries. The AI powered assistant would provide a comprehensive repository of case-specific advice and guidance, supporting caseworkers in making informed decisions.
  • Working with industry to create a set of principles, informed by government AI and GenAI frameworks, which will set out expectations of third parties’ use of AI in software where it interacts with HMRC and the tax administration system. This will give developers the confidence to introduce AI functionality into their products in the UK, while minimising the risk of those products introducing error or non-compliance. 

Potential pitfalls 

There could be benefits for taxpayers and agents if HMRC can make effective use of AI to improve customer service. However, there are potential pitfalls.  

Members may have seen reports about a recent case involving a freedom of information request (FOI) to HMRC. The FOI (submitted by an R&D adviser) asked for information about HMRC’s use of AI models in R&D compliance – prompted by concerns about some HMRC correspondence relating to R&D claims. 

The Financial Times, which saw HMRC’s eventual response to the FOI, reported that HMRC said that its R&D tax credits compliance team didn’t use generative AI as part of work on R&D claims: “This technology was not approved for use in generating taxpayer letters”. However, the article went on to report suggestions that some individual caseworkers might have made unauthorised use of AI, giving rise to various concerns, for example, about confidentiality.   

The case illustrates the importance of HMRC being transparent about its use of AI – and having robust safeguards and controls in place, so that taxpayers can be confident that AI is only used in line with the responsible and ethical approach HMRC has promised. 

Let us know what you think 

We respond to tax consultations and calls for evidence and attend meetings with HMRC at which service levels, delays and other issues you raise with us are discussed. We welcome input from members to inform our work; email us to share your insights and feedback. 

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