UK HMRC Could Ask AI Platforms to Hand Over Taxpayer's Tax Chat Records

Draft UK legislation would broaden HMRC's information-gathering powers by replacing section 114 of the Finance Act 2008's 'computer records etc' heading with 'Digital information' and substituting 'anything' for wording about computers, potentially letting HMRC request records showing how taxpayers calculated figures — including AI chatbot conversations, though the draft never mentions AI explicitly. The Independent reported on 11 November 2026 that HMRC could ask software providers and AI platforms for such information, with failure to comply carrying an initial £300 penalty and penalties of up to £3,000 for failing to report inaccuracies. An HMRC spokesperson said: 'We can only request information where we already have a lawful basis to do so,' and the policy paper ties commencement to Royal Assent for the Finance Bill 2026–27 rather than a fixed date; consultation closed on 7 September 2026.

UK HMRC Could Ask AI Platforms to Hand Over Taxpayer's Tax Chat Records Draft changes would broaden the definition of digital information HMRC can request, but do not explicitly give the tax authority access to entire chatbot histories HMRC https://www.ibtimes.co.uk/hmrc-bank-deductions-lower-value-tax-debts-2029-1828720 could seek information about how taxpayers used AI to calculate their tax under proposed changes to the authority's information-gathering powers. The draft reforms could bring some digital records within scope, but they do not explicitly refer to AI or grant HMRC unrestricted access to chatbot conversations. The Independent reported on 11 November 2026 that HMRC could ask software providers and AI platforms for information showing how taxpayers arrived at figures, extending scrutiny beyond the totals submitted on a tax return. Failure to comply with an information notice can attract an initial £300 penalty. Taxpayers who fail to report inaccuracies in information supplied can face penalties of up to £3,000, The Independent reported. HMRC says it must have a lawful basis to request relevant information. Whether a particular AI conversation could be required would depend on the scope of the request and the circumstances. Tax Calculations Could Bring Chat Records Into Scope The proposed reforms address how tax information is created, stored and processed through software, automated systems and digital services. HMRC says it wants to understand how relevant tax figures were produced, including calculations generated through automated processes. Its policy paper says the changes would support more accurate tax reporting and strengthen compliance. That has prompted questions about whether prompts, chatbot conversations or AI-generated working papers could be disclosed if they formed part of a tax calculation. A record's relevance would depend on the information HMRC was entitled to request. The Independent highlighted possible implications for people using ChatGPT https://www.ibtimes.co.uk/woman-accuses-chatgpt-false-cancer-hope-1829190 , Copilot and Claude https://www.ibtimes.co.uk/claude-bypassed-paywall-georgia-election-data-1828197 . The proposals do not confirm that users will have to hand over entire chat histories. Broader Wording, Rather Than an Explicit AI Power Nacionale reported that HMRC already uses Schedule 36 of the Finance Act 2008 https://www.ibtimes.co.uk/hmrc-letters-wealthy-taxpayers-assets-overseas-finances-1827762 to request information and documents reasonably needed to check a person's tax position. The draft legislation also changes section 114 of the Act. It replaces the heading 'computer records etc' with 'Digital information' and substitutes 'anything' for wording referring to computers, associated equipment or material. It defines a 'relevant thing' by reference to where information a person may be required to produce can be found. The provisions would also extend to people who created, developed or produced that thing. Nacionale noted that the connection to AI comes from advisers' interpretation of the broader wording, rather than from explicit references to artificial intelligence in the draft. Commencement Date Remains Unclear The Independent reported that the changes were expected to take effect in May. Nacionale noted, however, that the Government's policy paper gives no calendar commencement date, linking implementation instead to Royal Assent for the Finance Bill 2026–27. The policy material was first published on 13 July 2026 and updated on 3 November. Consultation on the draft legislation closed on 7 September 2026. HMRC says the section 114 changes would support its existing information powers, with safeguards continuing to apply. Information must still be reasonably required to check a person's tax position. 'We can only request information where we already have a lawful basis to do so,' an HMRC spokesperson told The Independent. Privacy Concerns Meet Taxpayer Responsibility Nicola Cain, chief executive and principal consultant at Handley Gill, told City A.M. that the changes could raise data protection concerns. She said HMRC would still have to comply with the UK General Data Protection Regulation GDPR , including requirements that access be necessary and proportionate. Cain warned that discussing tax matters on third-party AI platforms creates lasting digital records https://www.ibtimes.co.uk/companies-sell-workplace-data-ai-firms-1826648 that could expose taxpayers and their activities to scrutiny. The Independent also reported criticism from Anne Strickland of the Taxpayers' Alliance, who warned that broader powers could undermine ordinary taxpayers' privacy. © Copyright IBTimes 2026. All rights reserved.