HMRC announces finalists in competition to help close the tax gap
Source: gov.uk (2025-12-10)

Two finalists announced as part of HMRC's data competition.

- Two businesses have been awarded one-year contracts to develop and test technologies to help close the tax gap.
- HMRC’s competition brings together expertise and innovation from across the private sector to identify deliberate evasion, and safeguard money that funds public services.
- The two finalists identified ways to use new techniques to modernise HMRC’s approach in line with the government’s Plan for Change.
HM Revenue and Customs (HMRC) has announced two finalists of a competition to help close the tax gap, bringing together expertise from across the UK’s private sector to harness innovative, data-driven solutions to identify deliberate tax evasion.

The competition was launched in July 2025, exploring the use of novel analytical techniques and data to modernise the tax system - making it simpler, fairer and more efficient for everyone.

The successful finalists - Coefficient Systems Limited and BAE Systems Applied Intelligence Limited - are now entering a 12-month pilot phase. HMRC will work with them to explore how their proposed ideas can be developed and to test how well their proofs-of-concept will deliver and help close the tax gap. The intention is to support suppliers to translate these innovative concepts into practical tools that improve compliance and strengthen fraud prevention.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

Every pound of uncollected tax we raise means more money for public services. Partnering with cutting-edge private sector companies is a key part of our strategy to modernise the tax system and raise the revenue needed to deliver on the country’s priorities – cutting the cost of living, driving down waiting lists and reducing borrowing.

JP Marks, HMRC’s Chief Executive and First Permanent Secretary, said:

Closing the tax gap requires new thinking and new tools. Collaborating with private sector experts through initiatives like this competition allows us to harness the best ideas and technologies available. The solutions developed here will help us improve compliance, reduce fraud, and deliver a better experience for our customers.

HMRC received submissions from a wide range of private-sector organisations, including more than 50% from small and medium-sized enterprises (SMEs). They submitted proposals that showcased cutting-edge approaches in areas such as predictive modelling, fraud detection, and customer experience optimisation.

This new commercial approach is bringing HMRC a fresh wave of innovation and expertise from organisations of all sizes – from start-ups and SMEs to large Tier 1 businesses. This diversity of engagement is crucial to driving the innovation needed to close the tax gap and modernise the tax system. With an SME making it to the final two, this underscores HMRC’s commitment to supporting the growth of UK businesses and ensuring that smaller firms have the same opportunities as larger businesses to compete for transformation projects that help deliver public services.

This initiative is a key ambition in HMRC’s Transformation Roadmap (https://www.gov.uk/government/publications/hmrc-transformation-roadmap/hmrcs-transformation-roadmap), launched earlier this year. HMRC is embracing the potential of AI tools to create a tax system that works better for everyone.

The two finalists successfully demonstrated how their advanced data analytics approaches will improve efficiencies and simplify processes to reduce errors and help close the tax gap.

A video showcasing the competition event is available on YouTube.

HMRC Competition to Tackle Deliberate Evasion and Help Close the Tax Gap (https://www.youtube.com/watch?v=yb6xJgSzAW8).

As part of its commitment to becoming a more digitally advanced, data-driven organisation, HMRC is inviting external expertise into the public sector. By fostering partnerships and encouraging innovation, HMRC aims to create solutions that are not only efficient but also inclusive and future ready. Competitions like this demonstrate how collaboration between government and industry can drive meaningful change - ensuring that both sectors learn, adapt, and develop better services for everyone.

Further information

The competition has been running since July 2025. The competition process:
- a launch event that introduced participants to HMRC’s vision and the challenge themes
- a transparent commercial process was then launched, with interested bidders submitting 5-minute videos summarising their approach
- this was followed by a technical workshop and Q&A session for shortlisted bidders
- bidders then presented their solutions to a panel of HMRC judges, culminating in the final two attending an event at Downing Street.