The UK: Adept at tax collection with predictive analysis

Trending August 2013 - Her Majesty’s Revenue & Customs (HMRC) has created a predictive analytics platform to improve debt collection and risk evaluation. Its platform, called Adept, integrates analytics into debt management and is designed to customise debt collection interventions for millions of late tax payments each year. Adept is integrated with HMRC’s collection systems and uses predictive modelling to inform more sophisticated risk and behaviour-based collection strategies. It identifies different types of debtor groups and targets its communications to these groups based on their specific attributes. To date, it has been so successful that HMRC estimates it will collect an additional £3bn of debt by March 2015. HMRC is also learning from the financial services industry and using predictive modelling to identify customer behaviour that provides early warning signs of default on arrangements. The question of data accuracy is an important one, however. If the data is skewed with errors, the models are going to be inaccurate. To ensure that data is accurate, HMRC conducts a quality check as data is shipped from the debt collection system into Adept and converted into analytical form. Through Adept, HMRC is transforming the way it uses data. In fact, more data sources are being added, so new connections can be made. Its data-gathering powers means it is able to gather bulk data about businesses accepting credit and debit cards. By using a big data system called Connect, provided by Detica, HMRC says it is able to cross-match more than one billion pieces of data to detect risky taxpayers to investigate.