Source · Select Committees · Public Accounts Committee
Recommendation 35
35
Accepted
Experts recommend HMRC accelerate AI adoption for customer support, staff upskilling, and fraud prevention.
Recommendation
Written evidence, received from Southampton University academics and accountants, Dr Md Hosam Al Kaddour and Dr Nouha Saber, recommended that HMRC accelerates digital transformation, including investment in AI–driven customer support to handle routine inquiries and thus reduce call centre costs.70 Written evidence, received from Dr Edidiong Offiong Bassey (a lecturer and researcher on taxation at Cardiff University), recommended that HMRC upskill its staff to navigate AI–driven compliance tools effectively. 65 Qq 64–66 66 Q 67 67 HM Revenue & Customs and Department for Business & Trade, Electronic invoicing: promoting e-invoicing across UK businesses and the public sector, February 2025 68 Q 67 69 Committee of Public Accounts, Use of AI in Government, Eighteenth Report of Session 2024–25, HC 356, 26 March 2025 70 CTS0005 19 Dr Bassey also recommended that HMRC should engage with the use of AI to prevent fraudulent tax technology providers from misleading taxpayers and act to prevent unregulated AI–based tax avoidance schemes.71
Government Response Summary
The government agrees and states it has implemented the recommendations by embedding AI into core compliance and customer service functions, piloting Generative AI initiatives, launching new AI-powered compliance tools in 2025-26, and investing in staff training and reskilling.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 HMRC has written to the Committee alongside this Treasury Minute response. 6.3 HMRC is well positioned to take advantage of emerging technologies, particularly AI, to modernise operations, enhance customer experience, and improve productivity. With over two decades of experience applying AI in areas such as predictive analytics, risk assessment, and fraud detection, HMRC has embedded AI into core compliance and customer service functions. This includes tools like VAT Predictive Analytics, Bulk Data Exploitation Capability, and debt prediction models. 6.4 To further advance its AI ambition, HMRC is piloting several Generative AI initiatives: • A cross-government chatbot to improve navigation of HMRC guidance. • Copilot, trialled by thousands of staff, to enhance content summarisation, research, and search capabilities, with plans to scale significantly. • Call summarisation tools to streamline agent workflows and improve service delivery. 6.5 In 2025-26, HMRC will launch new AI-powered compliance tools and expand data-sharing collaborations (e.g. with the DWP). These efforts are supported by a secure Gen AI Landing Zone hosted in HMRC’s Cloud tenancy, enabling safe use of advanced models like GPT-4o 6.6 To ensure the right capability and capacity, HMRC has established an AI Board and delivery team, invested in training through the CDIO University and Digital Academy, and launched career development schemes to reskill staff into future-critical roles such as Cloud Engineers and Solution Architects.