HMRC using AI to profile people’s social media will increase tax compliance, say leading audit, tax and business advisory firm, Blick Rothenberg.
Fiona Fernie, a Partner at the firm, said, “HMRC has used the CONNECT system since the early 2000s to assist in identifying underpayment of tax. CONNECT uses (and has always used) advanced analytics such as pattern recognition, predictive modelling, and machine learning, which are all forms of AI. Social media is just one of the many sources CONNECT reviews.
“CONNECT was developed by BAE Systems Applied Intelligence and is reported to have cost somewhere between £45 million and £100 million to build. Published estimates suggest that the system has helped recover over £3billion in tax.
“Like any advanced analytic tool it has a huge impact on the workload of the individuals who use it. CONNECT can identify the patterns and anomalies in the data it reviews in seconds where human investigation would take months. CONNECT not only enables real-time risk profiling; it also supports the work carried out by HMRC staff during the course of investigations.”
She added, “The information gleaned and analysed by the CONNECT system is always also looked at by human investigators. As long as there is appropriate human oversight and safeguards, I do not see any problem with the use of AI to identify possible indicators that tax is not being paid at the correct levels.
“HMRC has published a statement to inform the public of its use of the internet and social media to support its compliance activities. Like other Government departments, such as the DWP, they are allowed to scrutinise and retain information from publicly available internet data, which includes content on blogs and social networking sites where no privacy settings have been applied.
“However, it is strange for HMRC to state that AI is only used as part of criminal investigations into tax fraud, as CONNECT uses real-time risk profiling as a tool to help determine targets for investigation.”
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