HMRC gains power to access taxpayers' AI chat histories

Summarised from 4 outlets · Updated 11 Nov, 21:38 · Archive

HMRC will be able to demand taxpayers' artificial intelligence chatbot conversations as part of expanded powers to check tax compliance.

HMRC will gain the ability to access taxpayers' artificial intelligence chatbot conversations under changes to the law expected to come into force in May. The tax authority's existing powers to demand computer records are being expanded to allow it to inspect how tax figures are produced, including through AI platforms and software providers. Those who fail to respond to information requests face a £300 fine, whilst taxpayers who do not report inaccuracies could be liable for up to £3,000.

The changes come as a growing number of people use AI tools such as ChatGPT to help with their taxes. Self-employed individuals might ask AI tools which expenses they can claim, whilst landlords might use them to understand the tax implications of rental income. Seb Maley, chief executive of tax insurance provider Qdos, said HMRC was making sure it "isn't left behind" as more taxpayers and businesses put their trust in AI to manage their tax affairs.

However, HMRC will not automatically be able to read everyone's private chatbot conversations. The tax authority must have a lawful basis to request information, and it must be reasonably required to check someone's tax position. David Stirling, director and financial adviser at Mint Wealth, said taxpayers should remember that information entered into AI tools could become relevant if HMRC investigates how their tax figures were produced.

The changes have raised privacy concerns. Anne Strickland of the Taxpayers' Alliance warned that demanding private chatbot data "would be a deeply intrusive overreach by the taxman", adding that "HMRC already has sweeping powers, and expanding them further risks trampling over the privacy of ordinary Britons". The proposals form part of the Budget Bill, which is expected to become law at the end of May.

How it is being reported

• Hire a lawyer, don’t ask AI: Taxpayers warned as HMRC set to snoop on chat logsHMRC’s powers to probe digital records are set to increase under newly proposed rules, as the tax authority will soon be able to view the chat histories of AI chatbots taxpayers use for tax questions. The tax authority currently has powers to request and obtain copies of digital “records” if it has a legitimate reason [...]City AM · 11 Nov, 18:23
• HMRC will soon be able to snoop on taxpayers’ AI chat historyTaxpayers who do not respond to HMRC’s requests for information face a fine of up to £3,000The Independent · 11 Nov, 17:24
• Fury as HMRC to ‘probe taxpayers’ AI chat history’ in new crackdownThe tax authority has been warned it risks "trampling over the privacy of ordinary Britons" with the proposed move.Daily Express · 11 Nov, 15:18
• New rule lets HMRC snoop on taxpayers’ AI chat history – what you need to knowThose who fail to respond to information requests from the taxman could be hit with fines up to £3,000The i Paper · 11 Nov, 14:14

In this story: HMRC · Taxpayers' Alliance · ChatGPT · Qdos · Seb Maley · Anne Strickland · David Stirling

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem · Corrections log