The UK's tax body is reviewing its decisions to strip child benefit from about 23,500 claimants after it used travel data to conclude they had left the country permanently. Normally the benefit runs out after eight weeks living outside the UK, but many people affected complained that HM Revenue & Customs (HMRC) had stopped their money after they went on holiday for just a short time. The move came after MPs on the Treasury Select Committee demanded answers from the tax authority. HMRC has apologised for any errors and says anyone who thinks their benefits have been stopped incorrectly should contact them. In September, the government began a crackdown on child benefit fraud which it believes could save £350m over five years.

How capable are large language models (LLMs) in the domain of taxation? Although numerous studies have explored the legal domain in general, research dedicated to taxation remain scarce. Moreover, the datasets used in these studies are either simplified, failing to reflect the real-world complexities, or unavailable as open source. To address this gap, we introduce PLAT, a new benchmark designed to assess the ability of LLMs to predict the legitimacy of additional tax penalties. PLAT is constructed to evaluate LLMs' understanding of tax law, particularly in cases where resolving the issue requires more than just applying related statutes. Our experiments with six LLMs reveal that their baseline capabilities are limited, especially when dealing with conflicting issues that demand a comprehensive understanding. However, we found that enabling retrieval, self-reasoning, and discussion among multiple agents with specific role assignments, this limitation can be mitigated.

Having spent many years as second fiddle to Barcelona, Madrid surpassed its Catalan cousin in 2023 with startups securing 605 million ( 672 million) investment above Barcelona's 457 million ( 507 million). "Lots of Latin American talent is arriving thanks to the recent entrepreneur visa and talent programs run by Telefonica to bring promising startup founders from Mexico, Argentina, Columbia and Venezuela," explains Bu Haces, innovation consultant at Madrid's Impact Hub. The city has seen solid growth in transportation, mobility and fintech startups during the last three years with AI and deep tech supercharged by an astonishing 56 universities. "The business schools in particular are providing lots of startup networking opportunities, and are keen on developing an entrepreneurial ecosystem," says Miguel Arias, general partner at VC K Fund. With Meta, IBM, Google and Amazon all expanding in the city, the main worry is lack of housing stock for the flood of students, engineers and entrepreneurs.

Over the course of a number of years, thousands of parents were falsely accused of fraud by the Dutch tax authorities due to discriminative algorithms. The consequences for families were devastating. But, the fact that the scandal was eventually brought to light might prove the Netherlands is ahead of other countries, says Assistant Professor Błażej Kuźniacki. He urges for more transparency about the use of artificial intelligence (AI) in tax related tasks. It's of great importance when it comes to tax. Humans are not capable of going through a massive amount of data as fast and accurately as algorithms.

France experienced its worst drought on record last month, and officials have since been cracking down on conserving water. Now a new artificial intelligence (AI) technology could be added to their arsenal, after it successfully uncovered 20,356 illegally-built private swimming pools. The country's tax authority announced yesterday that the system allowed it to collect about €10 million (£8.5 million) from homeowners who failed to report the facilities. Developed by Google and Capgemini, the AI software was trained to spot pools in aerial images of nine French departments. The results of a trial run last October were then cross-checked with land registry databases, before Direction generale des Finances Publiques (DGFiP) took action.

French tax authorities using AI software have found thousands of undeclared private swimming pools, landing the owners with bills totalling about €10m. The system, developed by Google and Capgemini, can identify pools on aerial images and cross-checks them with land registry databases. Launched as an experiment a year ago in nine French departments, it has uncovered 20,356 pools, the tax office said on Monday, and will be extended across the country. Modifications to property, including adding swimming pools, must be declared to the tax office within 90 days of completion. As property taxes are based on the rental value of the property, improvements mean an increase in taxes.

I've made the argument before that technology has a lot to offer the field of tax. But for all the potential that technologies like artificial intelligence and machine learning algorithms have to streamline processes and inform policy, they remain tools--tools that must be wielded by real human beings (at least for now) at the direction of human policymakers (at least for now). The Kinderopvangtoeslagaffaire is a tax and political scandal currently rocking the Netherlands--literally translated to "childcare allowance affair." Despite complex political underpinnings, the core elements of the scandal are straightforward. In 2013, the Dutch government deployed artificial intelligence to handle childcare benefits applications and, as you might guess, it did not go well.

Until recently, it wasn't possible to say that AI had a hand in forcing a government to resign. But that's precisely what happened in the Netherlands in January 2021, when the incumbent cabinet resigned over the so-called kinderopvangtoeslagaffaire: the childcare benefits affair. When a family in the Netherlands sought to claim their government childcare allowance, they needed to file a claim with the Dutch tax authority. Those claims passed through the gauntlet of a self-learning algorithm, initially deployed in 2013. In the tax authority's workflow, the algorithm would first vet claims for signs of fraud, and humans would scrutinize those claims it flagged as high risk.

How global thinking on AI is shaping the world, from Berlin, Brussels, London and beyond. NEWS ABOUT POLITICO'S AI COVERAGE: Your AI: Decoded newsletter will be taking a break from this week as we refocus on core policy issues, but we are not giving up our coverage of artificial intelligence. On the contrary, we will intensify reporting on major political and policy debates on AI via news stories and events accessible to POLITICO readers around the world while covering the deeper policy stories as usual for our POLITICO Pro subscribers. As we prepare future coverage on emerging technologies including AI, I'd like to thank Melissa Heikkilä for her remarkable coverage on everything from algorithmic bias to neural networks and the politics behind large language models. In the meantime, please tune in on April 21 for our AI & Tech Summit to follow high-level interviews with top AI newsmakers, don't miss our upcoming Tech 28 ranking of the most influential players in technology on May 18 and subscribe to Mark Scott's free Digital Bridge newsletter here.

Chermaine Leysner's life changed in 2012, when she received a letter from the Dutch tax authority demanding she pay back her child care allowance going back to 2008. Leysner, then a student studying social work, had three children under the age of 6. The tax bill was over €100,000. "I thought, 'Don't worry, this is a big mistake.' It was the start of something big," she said.