Top tax expert issues AI warning

A top tax expert has sounded an urgent warning about AI and HMRC.

Dr Chris Wales, a former senior Treasury adviser to former UK prime minister Gordon Brown, said that HMRC might be about to let AI track people's and businesses' income and expenditure without them knowing.

He fears that the UK tax authority is about to copy the Spanish model.

Previewing his latest book - Hacienda and the Dual State - written with international lawyer Robert Amsterdam on the Spanish tax authority, Agencia Tributaria, he said: "From 1 January, every single invoice will go through the tax agency in Spain. The Inspector can already obtain all your utility bills and will soon find out which clinic and pharmacy you use and what you buy there, which restaurants you eat at, where you purchase wine and groceries, what kind of car you have, how far you drive and where you park, what flights you take and which hotels you use. Information security? A thing of the past."

He continued: "I am far from being a libertarian, but I see great danger in the direction in which tax authority powers are going, particularly because the process doesn't seem to involve our active consent. There is little parliamentary debate about it. In Spain it is simply out of control. In the UK, let's see."

Dr Wales, who is currently senior research adviser at the International Centre for Tax and Development, is worried that the CONNECT AI programme already used by HMRC in the UK, is now close to following Spain's lead.

He added: "HMRC has been using sophisticated information technology for years including an AI system called CONNECT which, as early as 2023, was said to contain more than 55 billion taxpayer-related data items.

"It will be much bigger today with these billions of pieces of information about taxpayers capable of being sorted quickly by AI."

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