HMRC’s expanding use of AI in tax avoidance: What it means for multinational enterprises
HMRC is significantly scaling up its use of artificial intelligence (AI) to detect tax avoidance and non‑compliance. While analytics have long supported HMRC’s work, it is now moving into a far more proactive phase – using AI models and automated bots to review huge volumes of publicly available data at speed and at scale. HMRC leaders have confirmed that AI is now embedded in routine compliance work, with “digital triage” set to become standard practice.
This shift has important implications for multinational enterprises (MNEs), especially in areas where manual enforcement has historically been limited simply because of the time and resource required. One such area is the legal requirement for large businesses to publish a UK tax strategy online.
UK tax strategy publication
As a reminder, under the Finance Act 2016, large UK businesses must publish a UK specific tax strategy if they meet one of the following thresholds:
- UK turnover above £200m or balance sheet assets over £2bn
- UK sub‑groups of multinational groups exceeding the threshold
- Partnerships meeting the same criteria
However, some MNEs are:
- Unintentionally hiding the strategy deep within their website
- Failing to update it every year
- Publishing only global policies that don’t meet UK requirements
- Simply overlooking the requirement altogether
How AI could uncover non‑compliance
Tasks that once took HMRC officers hours can now be completed by bots in seconds. For large groups that have never been challenged before, the risk profile is shifting rapidly.
- Missing or outdated UK tax strategies
AI will instantly identify where strategies are absent, out of date or hidden. - Inconsistent messaging across disclosures
AI can cross-reference tax strategies with annual reports, ESG statements and public tax commentary – spotting inconsistencies that previously went unnoticed. - Complex multinational structures
AI modelling can highlight high-risk structures, low-tax jurisdictions and mismatches between UK disclosures and global reporting.
The result is faster, more targeted enquiries.
What this means for multinational enterprises
AI-enhanced oversight increases exposure for MNEs:
- Less opportunity for “benign neglect”
- Higher likelihood of HMRC opening enquiries
- Increased reputational risk for public-facing compliance failures
- Data-led scrutiny around transfer pricing, governance and transparency
Simply, businesses that have avoided detection in the past should not rely on that continuing.
What multinational groups should do now
- Review your UK tax strategy
Ensure it is compliant, UK specific, up to date and meets the statutory requirements. - Make it easy to find
If HMRC’s bots struggle to locate it, HMRC will assume non‑compliance. - Implement an annual review cycle
AI will pick up inconsistencies across years. - Ensure consistent messaging
Align your tax strategy with your annual report, ESG statements, transfer pricing documentation and public tax disclosures. - Prepare for real-time digital scrutiny
HMRC’s AI will accelerate risk assessment and increase expectations of transparency.
AI removes the resource barriers that previously limited HMRC’s ability to enforce certain obligations. Requirements like UK tax strategy publication – once a low visibility risk – are becoming high visibility compliance priorities.
The businesses that act now will be best placed to avoid future HMRC challenges.
We’re here to help
Azets supports multinational groups with:
- UK tax strategy drafting and publication
- Governance and tax risk management
- HMRC investigations and enquiry support
If you’d like us to assess your readiness for AI enabled HMRC compliance, or discuss tax matters generally, get in touch with our Corporate Tax specialists. Similarly, if you’re looking to regularise your tax affairs or are facing a tax enquiry, our Tax Investigations & Dispute Resolution team is on hand to support.
Contact us via the form below.