19 Sep 2023
by Matthew Ball

HM Revenue and Customs and the metaverse

Guest blog from Matthew Ball, Strategy Lead for HM Revenue & Customs. Part of techUK's #SuperchargeUKTech Week 2023.

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Understanding the metaverse?

Author Matthew Ball describes the metaverse as, “a massively scaled and interoperable network of real-time rendered 3D virtual worlds and environments which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments.”

That’s a lot to process, so within HMRC, we’ve found it more practical to link this to something more familiar and focus thinking on a ‘future internet’: one that’s more immersive, intimate, with greater elements of simulation and augmentation. We’ve found this higher-level characterisation allows us to focus on constitutive elements and themes, without becoming too hung up on definitions - and provides an easier entry point for engaging our internal stakeholders. 

HMRC and the metaverse

For the past year or so in HMRC we’ve been exploring the potential implications and applications of the metaverse for how we administer the UK tax system. This is part of a broader agenda to assess emerging technologies, themes, and concepts, to understand future threats and opportunities.

Once we began to investigate the metaverse, we saw how it could change the way taxpayers make and invest money - and drive new criminal and fraud threats. We also saw how the technologies involved might offer opportunities to improve our customer offer and to deliver our strategic objectives for the UK tax system, as set out in our Tax Administration Strategy.

More broadly we were interested in the questions the metaverse might pose for HMRC, UK Government and across international borders. We also wanted to understand how metaverse technologies were progressing in the wider commercial world and how they might interact with other enabling technologies like digital identity and AI.

How did we go about investigating the metaverse?

We first developed a list of research questions and hypotheses, the answers to which would begin to allow us to loosely prioritise where to focus our efforts. These primarily concerned HMRC and our operations, but we also looked beyond the borders of tax and the UK, to better understand the indicators of metaverse adoption in the wider world, thereby allowing us to gauge the urgency of our response. Informed by these questions and hypotheses, we began our journey of discovery by:

  • Engaging with internal experts from different teams and functions within HMRC, who have shared their insights and perspectives on the metaverse and its relevance for our work;
  • Conducting a detailed research and literature review on key topics related to the metaverse, such as its definition, history, current state, future trends, use cases, technologies, platforms, standards, regulations, risks, and opportunities;
  • Engaging with external stakeholders, such as government regulators, agencies, and international organizations, to understand their views and expectations on the metaverse, as well as to explore potential collaborations and use cases that could benefit all parties;
  • Using our emerging conclusions and early findings from our research and engagement activities to develop further questions and topics for deeper exploration.

What have we achieved?

This careful and patient work has given us a better structure for our knowledge of the metaverse, and a more refined view of priorities and areas we want to investigate next. We’ve also built a detailed corpus of general knowledge which we’re using to inform colleagues. Perhaps most importantly, we’ve made strong contacts with a range of stakeholders across and outside government, including other tax administrations and the World Economic Forum. Working with such diverse stakeholders, we can continue to hone collective understanding and responses.

Where next?

Our engagement and research have found that far from being an abstract and distant concept, the metaverse is something that continues to capture the imagination and, importantly, to attract investment. There are undoubtably opportunities to exploit the possibilities and mitigate risks, supported by continued research, testing, and collaboration.

The hype cycle is fickle, and investment has fallen from a (very high) peak, as expectations about the direction and pace of adoption of the metaverse evolve. But many tech leaders still see great potential in the power of the metaverse: Microsoft’s Satya Nadella states “I still am a believer in [virtual] presence. In 2016 I wrote about three things I was excited about: mixed reality, quantum, and AI. I remain excited about the same three things. Today we are talking about AI, but I think presence is the ultimate killer app.” Within HMRC we want to continue our exploration for as long as our analysis tells us there are benefits to be gained and risks to be avoided.

Predicting the future is a tricky business and it may be that the metaverse never fully takes off; or, perhaps more likely, develops in a different form to the one we imagine now. Nevertheless, the core themes and many of the enabling technologies of the metaverse are almost certain to persist and evolve. What is your organisation doing to understand them?

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Authors

Matthew Ball

Matthew Ball

Strategy Lead, HMRC