Thousands of Brits could face investigations by HMRC as the revenue authority funnels more resources into its crackdown on unpaid tax. The government department’s use of artificial intelligence and data analytics are making identifying tax dodgers easier than ever, according to experts.
The evolving approach helped HMRC to secure or protect around £10billion during the last financial year, reports suggest. Connect, HMRC’s data analysis system, which cross-checks information from banks, social media platforms, online marketplaces and tax returns, led to 540,000 investigations during the 2024/25 year, law firm Pinsent Masons said.
Ian Robotham, partner at the firm, said: “The algorithms that it uses allow HMRC to spot anomalies that would otherwise go unnoticed by the human eye.”
Ian Dickinson, tax director at UHY Hacker Young, added: “HMRC seems increasingly willing to prosecute individuals who evade tax.”
The authority’s Fraud Investigation Service records tell a similar story, with 260 convictions secured against the most serious tax evaders during the 2025/26 year.
HMRC is also boosting its network of informants by offering a bolstered rewards scheme, with whistleblowers receiving between 15% and 30% of the extra tax collected when providing information which leads to over £1.5million being retrieved.
Individuals telling on their neighbours, colleagues and friends were handed a total of £1.4m after a record number of tip-offs in the last financial year, according to government data.
Hinesh Shah of Pinsent Masons said: “We’re expecting that the number and quality of whistleblower reports to HMRC will increase dramatically under the new reward systems – which is based on the US system.
“In the US, $123.5million was given to tax whistleblowers as rewards in the most recent year for which data is available.
“If HMRC starts issuing individual awards that go into the millions of pounds then that is going to lead to a radical change in behaviour.”