Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Accepted
HMRC plans significant investments in data, AI, and expertise to improve compliance targeting.
Recommendation
HMRC told us that the investment it secured as part of its recent funding settlement will help improve its data and understanding of the risks and better target its compliance activity so that, when it opens a case, it has 34 Q 87 35 C&AG’s Report, paras 3.10, 3.15-3.16 36 Qq 93, 104 14 a higher likelihood of securing the yield.37 It plans to bring in more wealth management experts to help the wealthy team’s understanding of wealth planning. It said it will also invest in its case management system and digitise the Inheritance Tax regime, which will help case workers to access data in a more timely and effective way. HMRC said it also plans to invest in artificial intelligence (AI), which it already uses in some way in the form of predictive analytics and machine learning. It said that AI presents a significant opportunity to improve productivity, through improved targeting and risking and optimising digital capabilities, which HMRC would expect to realise.38 Compliance investigations
Government Response Summary
HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population by Autumn 2026, after further design work on how the investment it has received through the Spending Review will be deployed. At Spring Statement 2025, the government announced plans to tackle offshore tax non‑compliance by the wealthy. The government published its Transformation Roadmap in Summer 2025 which sets out how HMRC will use investment to improve performance.
Government Response
Accepted
HM Government
Accepted
4. PAC conclusion: There is much more that HMRC can do to improve its work to risk assess and target wealthy people, in particular through the use of data and technology and recruiting wealth management experts. 4. PAC recommendation: Alongside its Treasury Minute response HMRC should write to the Committee to explain how confirmed funding to date will feed through to better compliance performance, and what it expects to achieve from future investment. This explanation should go beyond just the impact on compliance yield and should cover the expected impact on other performance measures, such as the proportion of cases that result in a positive return. HMRC should include in that letter further details of its plans to invest in new IT, as well as plans to ensure it has the right skills to undertake the data analysis necessary to risk assess and target wealthy people. 4.1 The government agrees with the Committee’s recommendation Target implementation date: Autumn 2026 4.2 At Spring Statement 2025, the government announced plans to tackle offshore tax non‑compliance by the wealthy. The government published its Transformation Roadmap in Summer 2025 which sets out how HMRC will use investment to improve performance. The First Permanent Secretary of HMRC has written to the Committee setting out how HMRC’s investment plans are intended to improve compliance outcomes overall. 4.3 HMRC is currently designing how the investment it has received through the Spending Review will be deployed. Following further design work, HMRC will set out what investments will help improve a range of compliance outcomes for the wealthy customer population. The department will set this out in more detail to the Committee by Autumn 2026.