HM Revenue and Customs has signed a 10-year agreement worth £175 million with British technology company Quantexa to strengthen fraud detection and improve customer service operations. The deal comes as complaints against HMRC continue to rise, with more than 93,000 recorded during the 2024/25 financial year.
The partnership will see artificial intelligence integrated into HMRC systems to help identify tax fraud, reduce administrative errors and support staff handling taxpayer enquiries. According to the BBC, the technology will combine HMRC data with external sources to detect suspicious activity and uncover hidden links between individuals and companies.
Public criticism of HMRC has intensified in recent years, largely because of delays in response times and difficulties contacting the department. Freedom of Information data obtained by the Contentious Tax Group showed complaints rose sharply from around 70,000 in 2020/21 to more than 93,000 in 2024/25.
AI Systems to Support Fraud Investigations and Taxpayer Services
The agreement with Quantexa marks one of HMRC’s largest recent technology investments. The UK-based company, valued at around £1.9 billion, already works with major firms including HSBC and Vodafone.
According to reports, Quantexa’s systems are designed to analyse large volumes of information and identify patterns that may not be immediately visible to investigators. HMRC said the technology will help detect incidents of fraud more quickly while also reducing unintentional tax return errors.
The platform will also assist with customer service operations. Quantexa said its systems can help identify legitimate payments made using incorrect reference numbers, a common issue that can create delays and administrative complications for taxpayers.
Vishal Marria, founder and chief executive of Quantexa, said governments increasingly face challenges managing fragmented data systems. He stated that the partnership would help HMRC create “confident, informed decisions” by embedding what he described as “trusted, governed AI” into public sector operations.
Marria also stressed that artificial intelligence would not replace staff. According to the BBC, he said the technology was intended to “support human decision-making, not replace it”, adding that AI systems used in government must remain transparent, explainable and auditable.
Rising Complaints and Concerns over Public Sector Technology
The announcement arrives amid growing concern about HMRC’s customer service performance. Slow response times have consistently been among the main complaints raised by taxpayers attempting to contact the department.
According to Freedom of Information data cited by several outlets, complaints against HMRC exceeded 93,000 during the last financial year. The figures have fuelled criticism of the department as pressure on public services continues to increase.
Quantexa stated that the programme would modernise HMRC’s core data infrastructure and provide a more connected view of departmental information. The company added that this would support wider efforts to close the tax gap and improve services for taxpayers.
The partnership has also drawn attention because of the government’s preference for using a British technology company. According to the BBC, the decision reflects wider concerns within government about “digital sovereignty” and dependence on large US technology firms for sensitive public sector systems.
Those concerns previously emerged during debate surrounding the NHS contract awarded to US technology company Palantir. In this case, Quantexa said HMRC data would remain within HMRC systems and would not be removed from the department’s environment. The agreement is expected to run for a decade as HMRC continues efforts to modernise operations and strengthen its response to tax fraud and administrative errors.
