HMRC, or Her Majesty's Revenue and Customs, has confirmed its use of artificial intelligence (AI) to monitor social media as part of investigations into suspected tax evasion.

This initiative is part of a broader strategy aimed at recovering £7 billion from the UK's £47 billion tax gap, with AI expected to enhance efficiency in identifying tax underpayment.

Experts have acknowledged the potential benefits of AI in streamlining processes but caution against risks such as mistaken identity from fake or hacked social media accounts.

HMRC emphasizes that AI will not replace human judgment, operating under legal oversight to ensure responsible use and maintain accountability.

However, concerns have been raised by politicians, including Conservative MP Bob Blackman, about the potential for AI errors leading to unjust legal actions without sufficient human oversight.

Sir John Hayes, a former security minister, has drawn parallels between the reliance on AI and the Horizon Post Office scandal, highlighting the risks of automated decision-making.

There are also concerns about the chilling effect on freedom of expression, as individuals may self-censor their social media posts to avoid scrutiny from tax authorities.

The use of AI in this context raises ethical questions about surveillance, balancing the need for tax compliance against public trust and privacy concerns.

The practice of reviewing social media for evidence of tax fraud has been ongoing, with notable cases successfully exposing fraudulent claims based on social media activity.

Despite the integration of AI, HMRC asserts that human oversight remains crucial, with humans retaining the final say in enforcement decisions.

Interestingly, HMRC's adoption of AI is not expected to lead to job losses, as the agency plans to hire an additional 5,500 compliance staff to support its operations.

Recent legal developments have mandated HMRC to disclose its use of AI in processing tax relief applications, reflecting ongoing scrutiny of its practices.