You asked a chatbot how to handle your tax. Under the new HMRC AI chatbot tax rules, HMRC may one day ask to see that conversation.
The HMRC AI chatbot tax rules are not a new law yet, but they hit a nerve on November 11. The Telegraph reported that HMRC could ask taxpayers for their AI chat histories during a tax check. Meanwhile, HMRC insists it simply wants its old powers to cover how records are kept today.
What the HMRC AI Chatbot Tax Rules Would Change
At the moment, HMRC can ask for computer “records” when it needs them to check whether someone paid the right tax. According to The Telegraph, the new wording would widen that to any “relevant thing”.
In practice, that could reach far beyond spreadsheets. For example, a prompt history, an AI-written working paper or a chatbot answer that fed into a tax figure could count. In addition, third parties such as AI platforms and software providers may have to share taxpayer information.
The changes sit in the Finance Bill 2026-27, which the Telegraph calls the Budget Bill. It has not passed yet, and the paper expects it to become law by the end of May.
Can HMRC Ask for Your ChatGPT Conversations?
Possibly, but only inside a real tax check. Nimesh Shah of Blick Rothenberg named Copilot, ChatGPT and Claude as AI tools that keep an audit trail. He then asked whether those prompts and conversations could become disclosable when they formed part of a tax calculation.
HMRC’s answer is narrower. A spokesperson said the change is “not about going through everyone’s use of large language models”. Likewise, the department says it can only request information where it has a lawful basis to do so.
So the risk is not random snooping. Rather, it is about what you can be asked to hand over once HMRC already has a reason to look at your return.
HMRC Schedule 36 Information Powers Explained
Schedule 36 of the Finance Act 2008 lets HMRC send information notices to taxpayers and third parties. Section 114 of the same Act explains how those notices apply to computer records.
The GOV.UK policy paper says notices to third parties may cover digital information, “including whatever is needed to understand how relevant tax figures have been produced”. Here is what the official paper and the reports say.
| Point | What it says | Source |
|---|---|---|
| Legal home | Schedule 36 and section 114, Finance Act 2008 | GOV.UK |
| Takes effect | From Royal Assent to Finance Bill 2026-27 | GOV.UK |
| New wording | “Records” widened to any “relevant thing” | The Telegraph |
| Who may hold data | Taxpayers, third parties, software providers | GOV.UK |
| Safeguard | HMRC must reasonably need the information to check a tax position | GOV.UK |
| First penalty | £300 for not answering a notice | The Telegraph |
| Inaccuracy penalty | Up to £3,000 for not reporting an inaccuracy | The Telegraph |
Why HMRC Wants to See How You Reached a Tax Figure
Tax work has moved into software and chat windows. In a September survey by the Administrative Burdens Advisory Board, more than 30% of businesses said they had used an AI system such as ChatGPT or Copilot for a tax question.
Six in ten of those users said they found the answer they needed. Besides that, a Finder survey reported last year that 40% of people had used generative AI for financial advice.
Seb Maley, chief executive of tax insurer Qdos, put it simply. HMRC is making sure it “isn’t left behind”, and it wants to see how someone reached a figure, not just the figure itself. Notably, the official paper says HMRC would first examine software on a voluntary basis.
Critics Call the HMRC AI Chatbot Tax Rules Intrusive
Not everyone accepts HMRC’s reassurance. Anne Strickland of the TaxPayers’ Alliance called it “a deeply intrusive overreach by the taxman”.
“HMRC already has sweeping powers, and expanding them further risks trampling over the privacy of ordinary Britons,” she told the Express.
On the other side, HMRC frames the change as housekeeping. “This is about updating our existing information powers to reflect how tax information is now stored and processed digitally,” a spokesperson said. The policy paper also states that the reform does “not create a new standalone information power”.
HMRC Bank Account Access Powers Come Next
The chatbot question is part of a wider push to close a tax gap of about £59 billion. At the Budget, Chancellor John Healey said HMRC will be able to recover low-value tax debts straight from bank accounts from July 2029.
According to the Express, that covers debts of up to £5,000 for individuals and up to £10,000 for companies. It targets people who repeatedly ignore HMRC while having enough money to pay.
Healey has already shown interest in AI and tax. Earlier, we covered the John Healey inheritance tax AI proposal and what chatbots told the Chancellor.
What the HMRC AI Chatbot Tax Rules Mean for You
First, treat any chatbot tax answer as a draft. Check it against GOV.UK before you file, because you stay responsible for your return, whatever tool you used.
Second, ask yourself whether your ChatGPT conversations are private enough for this. If a chat helped you reach a figure, keep it accurate rather than deleting it in a panic. ChatGPT, for instance, lets you export your data from its settings, so you can see exactly what it keeps.
Finally, if you run a small business, choose tools that keep a clean record of how numbers were made. Our Microsoft Copilot review compares its free chat with the paid Office plans.
What our trend tracker saw
We track rising AI searches four times a day. On the afternoon of November 11, 2026, “hmrc ai chatbot tax rules” was a Breakout query over 24 hours and up 900% over seven days. In Google Trends, worldwide, it was also the single top related query for “hmrc ai” that week. People were not looking for HMRC’s own tools. Instead, they wanted to know what happens to their own chats.
How we reported this
On November 11, 2026 we read the GOV.UK policy paper on the Schedule 36 and section 114 reform (last updated November 3, 2026), The Telegraph report republished on Yahoo News, and the Express report republished on AOL. Every quote comes from those pages. We wrote the draft with AI assistance, checked each figure against the sources, and Miloš Novaković edited it. This is news, not tax advice. How we use AI.
Want More on AI and Tax?
If AI already runs part of your bookkeeping, compare safer options in our list of top AI tools for small businesses.
Frequently Asked Questions
What are the HMRC AI chatbot tax rules?
They are proposed changes to HMRC information powers in the Finance Bill 2026-27. Reports say records HMRC can request would widen to any relevant thing, which could include AI chat histories.
Can HMRC see my ChatGPT conversations?
Not on its own. HMRC can only ask for information during a tax check where it has a lawful basis, and it must reasonably need the data to check your tax position.
When will the new HMRC information powers start?
The GOV.UK paper says they take effect from Royal Assent to Finance Bill 2026-27. The Telegraph expects the bill to become law by the end of May.
What is a Schedule 36 notice?
A Schedule 36 notice is a formal HMRC request for information or documents. You can challenge one if you do not hold the documents or if HMRC cannot show a reasonable need.
What is the penalty for ignoring an HMRC information notice?
Initially, the fine is £300, according to The Telegraph. Separately, failing to report an inaccuracy can cost up to £3,000.
Is HMRC getting bank account access powers too?
Yes. From July 2029, HMRC can recover low-value tax debts directly from bank accounts when people repeatedly ignore it. Reports put the limits at £5,000 for individuals and £10,000 for companies.
Sources
GOV.UK policy paper, Schedule 36 and section 114 reform (updated November 3, 2026), The Telegraph via Yahoo News (November 11, 2026), Express via AOL (November 11, 2026). *Photos: HM Revenue and Customs, 100 Parliament Street by HM Revenue & Customs, OGL 3, cropped and resized; HMRC undeclared income sign, Wivenhoe by Hamish Griffin, CC BY-SA 2.0, resized and placed on a blurred background.*
