HMRC introducing AI assistant as part of £500m digital investment plan to 'stop cheats in their tracks'

8 June 2025, 00:04 | Updated: 8 June 2025, 18:09

HMRC is set to introduce an artificial intelligence assistant as part of a government attempt to speed up wait times and save £200m annually by 2029.

The “Ask HMRC” digital assistant will be deployed across HMRC frontline services as part of the trial, forming part of a government investment plan to “reshape the state” and "stop thieves in their tracks".

As part of restructuring plans, the department is set to receive £500m in funding to “radically improve its digital operations”.

The AI helper is set to slash wait times, LBC understands, with the assistant on hand to help the public with enquiries, as well as taking notes behind-the-scenes.

HMRC is also planning to send 75% fewer letters by 2028-2029 as part of efficiency measures - a move that’s expected to save around £50m per year.

The government hopes the half a billion pound investment will “simplify and improve the day to day performance of HMRC”, insisting the move will “save time for staff and millions of taxpayers”.

Despite the increased use of AI, LBC understands that human assistants will continue to be on hand for queries requiring it.

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“It cannot be the case forever that HMRC handles approximately 100,000 calls each day, the DVLA processes around 45,000 letters daily, and Defra still manages over 500 paper form-based services – it has to change," a government source told LBC.

“We’re doing away with admin tasks if AI can do it better and to the same standard.

“So like people at home, we’re going to slash the time spent on note taking and the mind-numbing crunching– so we can focus on the thing that matters - HMRC staff being freed up to give a great service.

“In investing in AI we will help people pay the right tax to fund a relentless focus on delivering on our Plan for Change."

The AI assistant forms part of a wider digital investment plan within the department, with AI offering to “turbo-boost” productivity.

According to the government, the assistant will mean “no more endless searching or waiting on hold”.

Compliance officers will have an AI assistant that helps them sift through mountains of data, spot the biggest risks, and focus on closing the tax gap, according to a treasury insider.

The AI is set to help HMRC join up with other government departments to “spot risks and catch mistakes” resulting in “better targeting, less fraud, and more money for public services”.

The move follows the Cabinet Office’s decision to axe around 1200 staff in April, with a further 900 moving to other government departments. Forming part of a major Cabinet Office restructure, it’s hoped the plan will deliver £10 million in efficiency gains annually.

As part of the efficiency gains, it’s hoped the reducing bureaucracy, and improving flexibility across teams.

It's hoped the assistant will flag error-ridden tax returns, "give taxpayers a nudge" when filing online to double-check before they hit submit and help taxpayers avoid everyday mistakes.

It's also thought the assistant will "stop cheats in their tracks".

The assistant is also set to support caseworkers and improve workflow.

Whilst AI will speed up processes, the government says human will always has the final say on decisions that affect people.

The expected announcements come ahead of HMRC’s Transformation Roadmap set to be unveiled in summer.