The Public Accounts Committee has delivered a pretty scathing review of HMRC with their latest report headed “As tax collection costs rise, HMRC urged to put customers first – and be ready to adopt AI”.
Will they? I’ve written before about the obvious efficiencies that could be achieved if HMRC were to put their new 5,000 compliance officers to work using AI to spot patterns in submissions and data. A simple cross check of average rent yields, land registry ownership data and rents shown on tax returns would throw up plenty of landlords not submitting tax returns properly. Sure it would not be fool proof but it really does not have to be perfect.
HMRC could get enough to raise suspicions using AI and then let the normal enquiry process take over from there. They regularly send nudge letters to taxpayers asking if there is anything to declare. These work because the recipient knows that HMRC is aware of something that needs to be flushed out but they don’t quite know what it is. Often taxpayers will come clean about the thing HMRC already spotted and drop a few other things in the mix while they are on.
It seems ironic that a group of people typical seen as being out of touch (MPs) is giving tips HMRC (a body we know is out of touch) but that’s where we are.
HMRC must start putting it’s users first if it is going to restore confidence and speeding up it’s activities can only help.