HMRC Seeks Powers to Probe AI Chat Histories

Her Majesty's Revenue and Customs plans to expand its authority to obtain computer records, which would allow the agency to demand AI chatbot histories from taxpayers and third-party platforms to identify tax evasion. These proposals are included in the Budget Bill and are expected to become law by the end of May.

Under the new rules, taxpayers who do not comply could face fines of £300, while those who fail to report inaccuracies may be liable for up to £3,000. In a separate enforcement measure, Chancellor John Healey has authorized the agency to recover debts directly from bank accounts starting in July 2029. These automatic deductions will be capped at £5,000 for individuals and £10,000 for companies.

The Labour government is implementing these measures to recover an estimated £59.2 billion owed for the 2024/2025 tax year. The agency maintains that the updates simply reflect how digital information is stored and that requests will only occur on a lawful basis.

Anne Strickland of the Taxpayers' Alliance criticized the expansion as an intrusive overreach, warning that demanding chatbot data risks the privacy of ordinary citizens.