Warning over AI use by tax offices: calls for transparency and safeguards

By the Editorial Team · Sunday, September 20, 2026

Chris Wales, a former Treasury adviser, has urged for independent oversight and transparency in HMRC’s use of artificial intelligence to prevent potential privacy infringements and data misuse. His warnings underscore the need for clear safeguards as AI enables tax authorities to access unprecedented levels of personal information, raising concerns about fairness and citizens' ability to challenge audits.

A former adviser to the Treasury has raised concerns about the increasing use of artificial intelligence by tax authorities, emphasizing the need for transparency and regulatory safeguards. Chris Wales, who served on the Treasury’s council of economic advisers, warned that without proper oversight, AI could lead to excessive intrusion into citizens’ private lives and potential misuse of data.

Wales called for an independent review of HM Revenue & Customs’ (HMRC) implementation of AI technologies, highlighting the importance of making the algorithms behind these systems open to scrutiny. He stressed that taxpayers should have the ability to challenge their selection for audits, warning that the tax authorities will soon possess far more information about individuals than previously imaginable.

“The tax authorities are soon going to know vastly more about us than we could have imagined,” Wales said, urging officials to establish clear standards of transparency and oversight. He also expressed concern over practices observed in other countries, where “punishment audits” have reportedly been used against individuals accused of noncompliance or dissent, sometimes resulting in coercion to pay taxes that are not legally due.

Wales clarified that his objections do not extend to legitimate efforts to detect and penalize tax avoidance or evasion. Rather, he cautioned against systems that extend beyond lawful scrutiny into coercive actions against taxpayers without adequate procedural protections.

In response, an HMRC spokesperson emphasized that the agency operates under powers granted by Parliament and is bound by strict legal safeguards, oversight mechanisms, and data protection laws. The spokesperson noted that while AI aids certain processes, it does not replace human decision-making and oversight. HMRC affirmed its commitment to the responsible and secure use of artificial intelligence technologies.

The debate highlights growing concerns about balancing efficiency and fairness in tax administration as AI increasingly influences government operations. As tax authorities explore new tools to enhance enforcement and compliance, experts and advocates alike call for clear frameworks to protect taxpayers’ rights and privacy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.