UK government helps tax avoidance, or does it?

A government chatbot is allegedly helping users avoid tax.

So reported The Telegraph, or as it's more commonly known, the Tory Party newsletter.

It trumpeted that after diligent work from one of its scribblers, they found Labour's new AI-powered assistant provided advice on how to avoid paying tax.

The chatbot is designed to help us poor souls navigate the rigours of life.,

The scribbler revealed that when first questioned about tax avoidance, the chatbot was coy, saying it could not give advice on the subject.

However, when pushed, it explained ways a person could legally reduce their liabilities.

Note the word legally. Nowhere was it suggested that there was any illegal advice.

This is what the newspaper said:

"But an investigation by The Telegraph found the official bot could be persuaded to give advice on ways to dodge paying inheritance tax. In one case it told the user to consider stashing their wealth in overseas trusts and property to legally reduce death duties."

I like the word dodge. Depending on our mood, that could either be interpreted as an innocent side-step, or a full blown illegal tax avoidance scheme. Take your pick.

But things became clearer in the next paragraph:

"There are numerous ways for people to legally avoid paying inheritance tax, but Labour will close one of the biggest loopholes – shielding money in pensions – from April next year. From then, pensions will be considered part of the estate and taxed at 40pc if it exceeds the tax-free allowance."

Ah, so we're still using the word legally and not illegal.

In other words, the chatbot was making a pretty good jobs of things. It was offering sound advice, saying there are 'legal' ways of avoiding inheritance tax and highlighting the loophole, which is being closed.

So not quite sure what point is being made here. If the chatbot had been peddling illegal methods then wow, we have a story, but telling people how to avoid paying tax legally is hardly 'stop the front page'.

People spend time and resources thinking about how they can legally reduce their tax bill, which is the right of everyone, but to imply that a government chatbot might be dishing out dodgy advice, is a bit of a big leap.

The embarrassing bit is that the app is available via GOV.UK and official government bodies, including HMRC, traditionally never give tax planning tips. So maybe the chatbot overreached itself?

A government spokesman trilled: “GOV.UK Chat doesn’t create new advice – it simply provides information already published on GOV.UK, in a way people can easily engage with, together with links back to the source so they can check for themselves.

“In this case, it’s reflecting long-established guidance on how inheritance tax rules and exemptions work – so it’s nothing new, just existing information presented in a different format.”

Er, yes, okay then, mic drop.

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