HMRC to look to data analytics in fight against tax fraud
HMRC plans to tender for data analytics provider after trial illustrates fraud and error risk
AN HM REVENUE & CUSTOMS TRIAL looking into methods for reducing tax fraud and error identified £20m of potential losses after 5,500 cases from a sample of 16,000 showed irregularities.
The taxman now plans to use “sophisticated data analytics” as part of its strategy to tackle the problem of tax credit fraud and error, which despite being at its lowest level yet, cost the taxpayer £2.09bn in incorrect payments in 2011/12.
Ministers have now asked HMRC to explore the types of service the commercial sector can offer on a larger scale, and to engage with potential suppliers to gain an informed understanding of indicative costs, benefits and timelines ahead of an invitation to tender.
The overall aim is to add capacity to HMRC’s existing workforce in order to significantly increase the number of successful tax credits compliance interventions and to drive down error.
HMRC ran a small-scale trial from May to July 2013 with Transactis and sub-contractor Bosch. Both were recruited to carry out the small-scale trial in line with standard Cabinet Office rules. A summary of the trial is due to published in the near future, although no date has been selected as yet.