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robot helpline |accountingweb | Will AI replace HMRC

Could artificial intelligence be a real threat to HMRC?


There has been much recent commentary on how artificial intelligence is taking over the world. Philip Fisher wonders whether HMRC could be one of its first conquests.

9th Nov 2023
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In the imaginations of some of the greatest thinkers of our generation artificial intelligence (AI) is taking on excessive proportions. In doing so, it often seems to be attempting to mirror far-fetched stories from science fiction.

Some say that it is only a matter of time before computers destroy humanity. That is a terrible prospect and we can only hope that the doom-mongers making these predictions are incorrect.

Last week, there was the faintly ludicrous spectacle of our country’s current prime minister interviewing a leading light in the field utilising the latter’s personal fiefdom. The unkind have suggested that this was Rishi Sunak’s attempt to follow former deputy prime minister Nick Clegg into a cushy job in IT.

An equally plausible theory is that the man who should be trying to run the country was actually auditioning to join so many erstwhile senior colleagues – Boris Johnson, Jacob Rees-Mogg, Nadine Dorries and, according to press speculation, Liz Truss among others – at what is fast becoming the former ministers’ rest home, GB News.

During the interview, Elon Musk offered this alarming speculation: “It’s hard to say exactly what that moment is, but there will come a point where no job is needed… You can have a job if you wanted to have a job for personal satisfaction. But the AI would be able to do everything.”

He has certainly been trying to apply this at his recent acquisition X (Twitter to you and me), where even critical staff have been ditched, though whether some have been replaced by AI or merely seen their roles cynically terminated at whatever cost to society is open for debate.

Too bad to be true

While Musk’s chilling idea makes for a good soundbite, and seems too bad to be true. In some areas of activity human input could disappear without anybody noticing.

While it is hard to imagine a virtual Chelsea or Manchester City and the imagination of human beings is necessary to achieve sublimity in most artistic endeavours, more routine jobs could undoubtedly disappear.

At some point, this column will return to the prospects for our own profession as even more roles begin to face competition from computers.

In the shorter term, and Mr Sunak might have had a hand in this, there is a parallel industry that really could succumb to the threat of AI in the very near future. That is HMRC.

Some might already believe that many roles there have disappeared in the face of not-very-intelligent technological artificiality.

Computers not to blame

Anyone who has tried ringing the department will almost certainly think that is the case. To be fair, you couldn’t blame computers for the shutdown in services over the summer. However, the perpetual phone loop syndrome owes much to computerisation, as does the exciting alternative of the random call drop 20 minutes in.

Some have even unkindly put forward the proposition that those answering the phone have often received so little by the way of training about the specifics of their special subject that we might as well be dealing directly with a computer.

In a very short time, you could see that all queries might be referred either to a computerised chatbot or the telephonic equivalent. Indeed, this is effectively what many of us have already discovered, giving up in disgust and taking a flyer on the basis that it is no longer possible to get intelligent guidance in a timely manner.

The checking of returns has long been delegated to what we must now begin to refer to as AI, as is most, if not all, of the administrative function around returns, cash collection and even the levying of interest and penalties. It is probably better not even to go into the lovely prospect of Making Tax Digital today.

High-level stuff

That doesn’t leave much else, apart from the high-level stuff and this is where it gets interesting.

While the Treasury is the primary progenitor of new tax legislation, there are still a small number of high-powered technical whiz kids working at HMRC who help to ensure that new law achieves its desired goals. Sadly, they could find themselves redundant if the Chancellor of the Exchequer decides to go the whole hog and trust that AI can replace them effectively.

Large-scale investigations also utilise the services of high-powered individuals but, once again, they might be sacrificed to algorithms, although this could come at a great cost to the Exchequer if their skills are not adequately replicated.

More realistically, as has been so obvious in recent years, these services might be contracted out to the Big Four firms of chartered accountants, though this presents its own problems as their goals and those of government are not always fully aligned.

The next step up the ladder from there is the legal team, who formulate attacks on the worst evaders and then take them through the courts. Once again, a combination of AI and ridiculously expensive, independently contracted KCs could take their places.

That only leaves the final function and one that AI is genuinely well qualified to perform, which is turning out the lights when the final employee has received his or her P45.

Replies (5)

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By JustAnotherUser
09th Nov 2023 15:46

Could artificial intelligence be a real threat to HMRC? The biggest threat to HMRC, is HMRC.

Source: MTD

But yes,
AI could likely help 1,000 of people stuck in the queue to call them every day.
AI can likely replace the people at the end of the phone, or replace a portion of training needed.
AI can help identify targeted investigations, frauds, scams and all sorts of other tasks in this field.
AI could complete a tax return if fed the correct data.

It will be long, slow and incremental though and need investments in the right area, overseen by competent people and have the leaders held to account when they splurge 100s of millions on failures.

Thanks (3)
John Toon
By John Toon
09th Nov 2023 23:01

Erm, HMRC are already using AI and have been for years. Why is it that every AI commentary seems to forget this is an umbrella term for a whole host of things?!? HMRC have been using machine learning algorithms to analyse tax return data for anomalies for years. Most enquiries are triggered by the HMRC computers saying no, not human intervention

Thanks (3)
By asharries
10th Nov 2023 09:38

Does 'AI' stand for 'Any Intelligence'? If so , I'm for it, as it near on impossible to get a correct answer from HMRC in a timely manner.

Thanks (6)
By Ben Alligin
10th Nov 2023 09:38

Any form of intelligence at HMRC (artificial or otherwise) would be a considerable improvement on their current service level/performance.

Thanks (10)
By Dib
10th Nov 2023 15:42

Could Artificial Intelligence be a threat? Not half as much as Real Stupidity!

Thanks (1)