HMRC has admitted for the first time that it uses artificial intelligence (AI) to monitor taxpayers’ social media accounts as part of criminal investigations into tax fraud.
The tax authority said AI tools are used alongside the department’s traditional checks to analyse online posts, including those about expensive holidays or large purchases, if they appear inconsistent with a person’s declared income. Officials insist the technology is deployed only in criminal cases, with “robust safeguards in place” and within the law.
The disclosure comes amid growing concerns in Westminster over the expanding role of AI in tax enforcement and fears it could be used more widely in future.
Senior Conservative MPs have warned that reliance on automated tools could lead to mistakes, with inadequate human oversight.
Bob Blackman MP said: “If they start taking legal action against individuals based on that, it seems draconian… Without a human check, you can see there’s going to be a problem.”
Sir John Hayes, former security minister and chair of the Common Sense Group of Tory MPs, drew parallels with the Post Office Horizon scandal: “The idea that a machine must always be right is what led to the Post Office scandal. I am a huge AI sceptic.”
The AI monitoring tools operate alongside Connect, HMRC’s data analytics system used for routine tax investigations. Connect, introduced more than a decade ago, cross-references billions of data points – from bank transactions to property records – to flag potential tax evasion.
Chancellor Rachel Reeves has set a goal of recouping £7 billion of the UK’s £47 billion “tax gap”, with HMRC officials last month publishing a strategy that envisions AI being embedded into “everyday” tax processes.
The department is trialling AI-powered “assistants” to help the public complete tax returns and to support compliance officers in reviewing them. If patterns in a return suggest false information, the system could issue a warning that might later be used as evidence if fraud is proven.
Concerns about AI’s role in decision-making intensified after a tribunal ordered HMRC to reveal by 18 September whether AI was used in assessing claims for research and development tax credits. The ruling followed a Freedom of Information request from tax expert Tom Elsbury, who argued AI might already be determining the outcome of some claims.
Ministers maintain there is always a human “in the loop” for decisions affecting individuals, and HMRC insists humans retain the “final say” in enforcement actions.
The Department for Work and Pensions has also trialled AI tools, with 20,000 civil servants using the technology to draft documents and summarise meetings. A government source said HMRC has approached around a dozen tech firms for proposals on using AI to help close the £46.8 billion in unpaid tax – much of it linked to offshore accounts.
A HMRC spokesperson said: “Use of AI for social media monitoring is restricted to criminal investigations and subject to legal oversight. AI supports our processes but does not replace human decision-making. Greater use of AI will enable our staff to spend less time on admin and more time helping taxpayers, as well as better target fraud and evasion.”
