UK gov gears up for tax crackdown as Quantexa selected by HMRC in landmark £175m deal

The UK gov is gearing up for a tax crackdown as British AI firm Quantexa is selected by HMRC in landmark £175m deal.

In efforts to cut down on fraud tip-off payments, tax evasion and unpaid taxes, HM Revenue and Customs (HMRC) has executed one of the largest tech deployments in the public sector.

London-based Quantexa is the beneficiary of a £175m, ten-year partnership, designed to overhaul the HMRC data infrastructure.

The tax authority is in a scrap to recover billions lost to evasion and sophisticated fraud.

The deal aims to fix the “fragmented” legacy systems that have dogged HMRC’s ability to track the UK’s tax gap.

It's said that tax evasion is running at around £5.5bn, with a further £47bn in taxes going unpaid last year.

What´s more, it´s estimated that HMRC paid out nearly £1m in fraud tip-offs last year, up 92 per cent increase.

The number of raids on suspected fraudsters reached a record 648.

The deal is part of a wider move toward domestic technology for national infrastructure and a Treasury-led ‘Close the Tax Gap’ initiative.

It's hoped that the data/AI-led approach will help untangle complex webs of shell companies and directors used in multi-million-pound VAT and payroll frauds.

Quantexa chief executive Vishal Marria told the media: “If you use AI straight onto fragmented data, you’re not going to get the outcomes you desire. We are providing the underpinning and the foundation to the house. The data foundation is set in place for you to go and build whatever you want...

“Governments around the world are facing a common challenge: how to turn complex, fragmented data into confident, timely decisions. This is a blueprint for how the UK government deploys AI at scale."

As part of the new efforts, it's expected that UK Chancellor Rachel Reeves will launch a US-style whistle-blower scheme this month. The basis of this is an incentive to informants of up to 30 per cent of recovered funds.

The platform built by Quantexa will act as the filter for these tips. It will connect billions of data points to identify “high-probability” targets that currently slip through the cracks.

To allay concerns about Big Tech access, Quantexa pointed out that unlike other public sector data deals, its platform is deployed within HMRC’s own secure environment.