Plans to modernise HMRC’s information-gathering powers have opened a dispute over whether tax enforcement is keeping pace with technology or reaching too far into people’s private digital lives.

Under provisions in the Budget Bill expected to become law by the end of May, HMRC could request AI chatbot prompts, conversations and other digital material when they are relevant to checking a tax position. The changes would broaden the authority’s ability to seek computer records to cover a wider category of digitally held information, potentially including chats used to prepare tax calculations.¹

Privacy campaigners, whose concerns have been amplified by right-leaning outlets, say that distinction may prove difficult in practice. Anne Strickland of the TaxPayers’ Alliance called compulsory disclosure of private AI conversations “a deeply intrusive overreach by the taxman,” arguing that broader powers could undermine ordinary people’s privacy.¹ A Daily Express opinion piece went further, portraying the proposal as part of a wider expansion of state surveillance and questioning how officials could isolate tax-relevant exchanges from personal material.²

HMRC rejects the suggestion that it intends to inspect everyone’s chatbot use. A spokesperson said the proposal is “about updating our existing information powers to reflect how tax information is now stored and processed digitally,” adding that the authority can seek information only where it already has a lawful basis.³

Tax professionals offer a more qualified view. Nimesh Shah of Blick Rothenberg said the central task would be ensuring the powers “remain proportionate,” particularly where material may be commercially sensitive or personal.¹ Seb Maley of Qdos said HMRC was responding to the growing use of AI in tax affairs and wanted to understand not only a system’s answer, but how it reached it.³

Existing Schedule 36 notices require HMRC to show a reasonable need for requested information and can be challenged. The debate, therefore, is less about whether AI-assisted tax work can be scrutinised than where the line should be drawn between audit evidence and private digital life.