HMRC is now employing artificial intelligence to identify potential tax fraud by analysing social media activity. The AI scans platforms for 'lifestyle inconsistencies,' where individuals' posts showcasing luxury items or holidays don't align with their declared income.
This technology cross-references publicly available social media data with tax returns, bank information, and employer records. AI serves as an initial filter, flagging suspicious cases for further review by human investigators. HMRC emphasises that AI is only used in criminal investigations and does not replace human judgement, with legal oversight in place. The goal is to streamline processes, enabling staff to focus on assisting taxpayers and targeting fraud more effectively.
While HMRC insists on robust safeguards and human involvement, concerns have been raised regarding potential errors and unfair penalties. Some experts caution against over-reliance on AI, citing risks of mistaken identity and the need for human oversight to ensure accurate decisions.
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