Labour to give HMRC £500m for AI boost
HMRC is set to receive £500m in funding to support the introduction of an AI tool that will assist the public with enquiries.
According to a report by LBC, ‘Ask HMRC’ will be a digital assistant deployed across the department’s frontline as part of the trial. The tool forms part of the government’s effort to reduce wait times and its goal of saving £200m annually by 2029.
The government hopes the investment will “simplify and improve the day-to-day performance of HMRC”, insisting the move will “save time for staff and millions of taxpayers”.
The tool will be used by the agency to try to cut down the amount of resources allocated to answering the phones and waiting times on helping people with enquiries.
A source told the broadcaster that while people will continue to be on hand for queries, the organisation will outsource admin tasks if AI can do them better and to the same standard.
Last month, a Public Accounts Committee (PAC) report called on HMRC to make sure it is well-placed to capitalise on the opportunities presented by AI.
HMRC questioned over AI safety
The same report noted the potential for AI to enhance HMRC’s productivity and services; however, it also highlighted that the agency’s outdated technology would limit its use, making it more susceptible to exploitation by malicious actors.
Speaking to City AM, John Hood, a tax partner with Moore Kingston Smith, highlighted: “Providing AI support to investigators will help to identify problems with tax returns. But HMRC needs to focus on identifying ghosts – people who are not in the tax system or operate in the shadow economy.”
Hood pointed out, “A concern is the use of AI to take notes; where will this data be stored, and how will HMRC ensure that this is encrypted and anonymised to minimise the risks that personal data is lost.”
While, Andrew Burman, principal of tax technology at Ryan, added: “If AI can access the information it needs in a digital/structured form, then HMRC may be able to mine their taxpayer data to identify potential areas for further investigation.”
However, he questions if HMRC had the granularity of data to do that and “really leverage the power of AI”.
Last week, the Treasury Select Committee criticised two senior HMRC officials for not reporting a £47m phishing attack sooner.
Speaking to the MPs on Wednesday, HMRC’s deputy chief executive Angela MacDonald said that a “lot of money” was taken and “it’s very unacceptable”.
Chair Dame Meg Hillier told the HMRC officials, “A word to the wise… let me use my position as chair just to remind you, gently – well perhaps not so gently – that it would be normal to advise parliament of things if you appear in front of a committee. Not to have it announced during the committee hearing.”
However, research published last month by HMRC revealed that confidence in the agency’s ability to keep taxpayers’ data confidential was high, with 58 per cent of respondents being confident and 15 per cent marked as not confident.
The agency also pointed out that its figures were above the government more generally (49 per cent confident, 19 per cent not confident).