HMRC Signs £175M AI Deal With Quantexa to Fight Tax Fraud
BBC Business reported Thursday that the UK’s tax authority has entered a decade-long, £175m HMRC AI contract with homegrown data intelligence company Quantexa to sharpen its ability to catch fraudsters and correct taxpayer mistakes.
What the Quantexa Deal Covers
The agreement spans ten years and tasks Quantexa with merging HMRC’s internal data against external information sources. That combined picture will help analysts surface concealed networks of companies and individuals hiding fraudulent activity. The platform will also support frontline customer service staff and recover legitimate payments sent to HMRC under incorrect reference numbers.
Quantexa founder and chief executive Vishal Marria was clear that the technology is not designed to act autonomously. He told the BBC the system was built to “support human decision-making, not replace it.” All AI-generated findings will require human review before any action is taken against taxpayers. Marria also emphasised transparency, saying government AI tools must be auditable and explainable to citizens affected by their conclusions.
Background: Rising Complaints at HMRC
The contract arrives against a backdrop of mounting public frustration with HMRC’s performance. Government data and a Freedom of Information request by the Contentious Tax Group show complaints against the department climbed from just over 70,000 in the 2020-21 financial year to more than 93,000 in 2024-25. Slow response times were consistently among the top grievances driving that increase.
Digital Sovereignty Shapes the Choice
Whitehall’s decision to award the work to a British firm is no accident. The government has been pushing for what officials describe as digital sovereignty, reducing dependence on large US technology platforms for critical public infrastructure. That concern has grown louder following the scrutiny of a separate £330m NHS contract awarded to US data firm Palantir.
Quantexa, which counts HSBC and Vodafone among its corporate clients, carries a valuation of $2.6bn. Marria stressed that HMRC data will stay within HMRC systems at all times, with staff serving the government department kept operationally separate from the wider business.
What Comes Next
The deal signals a broader shift in how public-sector bodies are deploying AI, favouring explainable tools with human oversight rather than fully automated systems. With nearly 93,000 complaints logged in a single year, the pressure on HMRC to show measurable improvement is substantial. Quantexa now has a decade and £175m to deliver it.
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