Tax agency deploys AI to monitor social media for tax fraud

HM Revenue and Customs is using artificial intelligence to snoop on suspected tax cheats' social media accounts, it has emerged. The taxman is using AI tools to scour social media posts for evidence of tax fraud and inconsistencies in income.

It's the latest revelation of a government body using AI for its decision-making and processes. But if you abide by the rules you won't have to worry about AI snooping on your Instagram posts. The tax office is adamant AI tools are only used for social media monitoring in criminal investigations and with legal oversight.

This isn't a new process – AI has been used to monitor social media accounts for 'years', HMRC says. But this fresh revelation has sparked a wave of concern from experts and politicians who say there is a risk AI could get it wrong - and accuse innocent households of evading tax, the Telegraph reports.

Tax experts say that this could spark case of mistaken identity if AI is used to collate information about an individual from social media. Plus, there is a risk that accounts could be hacked or fake accounts could be created which could complicate the process. But officials maintains that there are robust checks and balances in place.

An HMRC spokesman said: 'Use of AI for social media monitoring is restricted to criminal investigations and subject to legal oversight. AI supports our processes but – like all effective use of this new technology – it has robust safeguards in place and does not replace human decision-making. Greater use of AI will enable our staff to spend less time on administration and more time helping taxpayers, as well as better target fraud and evasion to bring in more money for public services.'

AI is currently used to 'streamline' administrative tasks at the Revenue including internally using chat assistants to allow better access to information and also to summarise calls for advisers so they can cut down the time it takes to wrap up a call.

The revelation of HMRC's AI use comes as it is under pressure to close the tax gap – the difference between the amount of tax that HMRC should be raking into its coffers and the amount it actually does.

It's thought the use of AI in the Revenue will become widespread on the quest to rake in more money as it was last month revealed AI tools will spread to 'everyday' tax processes. It is hoped this will pull in an additional £7billion for the tax office.

One of HMRC's new processes will be using AI tools to identify suspected tax evaders and nudge them to pay what they owe. It says AI tools will allow its staff to focus on more complex work instead of replacing jobs – it says it will hire some 5,500 compliance staff.