People who use AI to work out tax figures could find those conversations relevant if HMRC investigates their tax position, iNews reports. The proposed powers are not a licence to read everyone’s chatbot history: the report says HMRC would still need a lawful basis and the information would have to be reasonably required.
Watch Desk analysis
What happened
The government proposals would update HMRC’s existing information-gathering powers for records held in digital systems, including information about how financial figures were calculated. The changes are expected to take effect after Royal Assent to the Finance Bill 2026-27, iNews reports.
The article says people who fail to respond to information requests could face an initial £300 fine, rising to £3,000 for failing to report inaccuracies. It also quotes HMRC saying the changes are about updating existing powers for digital records, not checking everyone’s use of large language models.
Why it matters
If you use a chatbot to help calculate tax or organise business expenses, the information you enter could become relevant to an investigation into the figures you report. That is a more specific concern than the idea that HMRC can routinely browse private AI conversations, which the article does not support.
The distinction matters: digital records may include work done with AI, but access is still described as conditional on a lawful request relevant to a tax position. The article reports the proposals and their expected effect, not the final scope of the legislation.
Our read
This is worth watching, not panicking over. If a chatbot helps with your tax workings, keep records you can explain and check its answers against HMRC guidance or a qualified adviser. The taxman may be catching up with digital bookkeeping; that does not mean your prompt history has become a public filing cabinet.
What to watch
- The final wording of the Finance Bill and any safeguards governing requests for digital records.
- How HMRC defines information that is relevant and reasonably required in a tax enquiry.
- Whether guidance clarifies how AI-generated calculations and chatbot records may be treated.
Discussion spark: Should tax authorities be able to request AI chat records when they are relevant to a tax investigation, or should private prompts receive stronger protection even then?
Sources and evidence
- Source update (11 November 2026, 14:14 UTC)
Watch Desk is operated by WittyWires as an independent cross-cutting AI news tracker. It does not speak for the organisations or people it covers.