HMRC and Technology: Hector goes AI

HMRC and technology

Introduction

Cast your mind back, dear reader, to a time not so long ago when marketing seemed more gentle and the notion of digital taxation extended only to counting on your fingers (and possibly your toes too) while filling in your self-assessment return.

You may recall a bowler-hatted cartoon chap named Hector who, for six years until his retirement in 2001, was the central character in television and print advertising on behalf of what was then still known as the Inland Revenue.

Hector was a gentle, portly chap, created in order to give personality to the Revenue’s operations which, up to that point, had been considered rather grey and slightly mysterious.

Voiced by the famous film actor Sir Alec Guinness, he became particularly synonymous with the campaign to ensure people filed their returns on time.

Staff at Revenue HQ, though, grew resentful, maintaining that he simply did not represent what 21st-century tax collection was all about.

HMRC and technology – developments

If he was out-dated more than a decade ago, recent developments would definitely confine him to the history books.

You see, HMRC has been steadily and stealthily developing its technological arsenal, aiming to make the processes of tax collection and investigation more efficient and effective.

Arguably the most public evidence of HMRC and technology has been the launch of a Government initiative known as ‘Making Tax Digital’ (MTD), which would mean taxpayers having to submit details of their income and expenditure to HMRC each quarter instead of the traditional annual return.

Only last week, HMRC announced that a pilot scheme for submitting VAT details via MTD is due to start in April, ahead of a more complete roll-out for that tax from 2019 for those businesses whose turnover exceeds the VAT threshold.

The Revenue has already acknowledged that the concerns of small firms have obliged it to defer the use of MTD to capture tax information from all businesses until at least 2020.

However, the set-back has not deflected HMRC from proceeding full-speed towards a more digital future.

HMRC and technology: artificial intelligence

In the last few days, a senior Revenue official has revealed a further expansion of HMRC and technology stating that she and her colleagues are “dipping our toe[s] in AI”.

As well answering customer service enquiries via social media, Brigid McBride, HMRC’s digital transformation director, disclosed that a “virtual assistant called Rita, a very simple robotics technology” was now helping deal with certain types of cases.

The spectre of robots running the rule over tax returns has, as you’ll imagine, put some parts of the national media into a bit of a flap.

That’s not least because last summer there were warnings about IT glitches at HMRC resulting in those individuals or organisations who filed online returns being overcharged by as much as £1,000.

I have to say, though, that whilst the prospect of ‘Terminator’-style robots assessing assessments to catch out those trying to dodge Corporation Tax, Capital Gains Tax or Inheritance Tax might be scary, the reality might well be slightly less frightening.

It is more, I believe, a case of artifice than Artificial Intelligence – HMRC rightly highlighting its enhanced technology but understanding that it’s some way off possessing an automatic method of processing all tax-related information and identifying irregularities whenever they occur.

Even so, Hector would be impressed.

 

 

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By | 2018-03-27T09:37:59+00:00 27 March 2018|Andy Wood, blog, HMRC, Tax policy|

About the Author:

Founder & Technical Director, Andy is a practical, creative tax adviser with a very broad tax knowledge. He is regularly quoted in the media as an expert on topical tax issues.

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