HMRC Signs 10-Year AI Deal with UK Firm Quantexa to Catch Tax Fraud

HMRC has signed a 10-year contract with British AI company Quantexa to use artificial intelligence to detect fraud and errors in tax returns.

The deal comes as HMRC faces growing pressure over response times — a Freedom of Information request revealed more than 93,000 complaints were made about the department in 2024-25, up from 70,000 five years earlier.

Quantexa CEO Vishal Marria told the BBC the technology is designed to "support human decision-making, not replace it." All AI-flagged decisions will still be reviewed by HMRC staff, and the company says taxpayer data will never leave HMRC's own environment.

What this means for small businesses: If you submit VAT returns, corporation tax, or self-assessment, this AI is now part of the process. That's not something to fear — Quantexa emphasises transparency and human oversight — but it is a reason to keep clean, accurate records. AI is very good at spotting patterns humans miss.

The deal is also a signal that AI in UK government is accelerating. Small businesses that adopt AI in their own processes will be better positioned to interact with increasingly AI-powered institutions.