There is much more that HMRC can do to improve its work to risk assess and target wealthy people, in particular through the use of data and technology and recruiting wealth management experts. HMRC says targeting its resources on more complex, higher-risk, higher yield cases, has resulted in higher average returns, increasing from £34,000 to £94,000 per case in the wealthy team. But the wealthy team closed 46% of its investigations with no yield at all in 2023–24. HMRC says it would like to reduce this number but explained that it does not know the facts until it opens an inquiry, when it may simply find that everything is lawful and in order. We think there is scope for HMRC to use artificial intelligence (AI) to better exploit and analyse data and, in this way, improve its risk assessment and targeting of wealthy individuals. Possible uses of AI to speed up the system include sifting large amounts of data and suggesting what information is missing from tax returns. HMRC agrees and expects new investment in AI, along with recruiting experienced tax specialists to help the wealthy team’s understanding of wealth planning, to help it to better target its compliance activity so that, when it opens a case, it has a higher likelihood of securing the yield. recommendation Alongside its Treasury Minute response HMRC should write to the Committee to explain how confirmed funding to date will feed through to better compliance performance, and what it expects to achieve from future investment. This explanation should go beyond just the impact on compliance yield and should cover the expected impact on other performance measures, such as the proportion of cases that result in a positive return. HMRC should include in that letter further details of its plans to invest in new IT, as well as plans to ensure it has the right skills to undertake the data analysis necessary to risk assess and target wealthy people. 5