A former senior Treasury adviser to Gordon Brown has warned that HMRC is on the cusp of using artificial intelligence to track people’s and businesses income and expenditure without them knowing, reports BritPanorama.
Dr Chris Wales, who served on Mr Brown’s Council of Economic Advisers for over six years, raised concerns while launching a book detailing the operations of the Spanish tax authority, Agencia Tributaria. His comments coincide with an upcoming event featuring former Labour Treasury minister Baroness Dawn Primarolo, where they will discuss how the Spanish approach to tax evasion could soon be adopted in the UK.
Dr Wales warned that confidentiality in personal life — beyond just financial aspects — could soon be compromised, questioning whether sufficient safeguards exist in the UK to prevent HMRC from emulating Spain’s stringent monitoring. “From 1 January, every single invoice will go through the tax agency in Spain,” he noted, highlighting the extent of data collection by Spanish authorities, which could include utility bills, purchasing habits, and even personal mobility.
He emphasized concerns over the growing powers of tax authorities, stating, “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.” He suggested that the lack of parliamentary debate around these changes is alarming, drawing parallels to the situation in Spain where oversight appears to be lacking.
Dr Wales highlighted HMRC’s existing CONNECT AI program, noting its robust capabilities and substantial database containing over 55 billion data items related to taxpayers. “It will be much bigger today,” he asserted, underscoring the capacity for quick data sorting and analysis by AI.
He also criticized HMRC’s refusal to disclose its used algorithms, arguing this prevents public scrutiny and accountability. “The system is understood to be used to target evasion,” he remarked, expressing concerns that such practices deem all taxpayers as potential evaders.
Both Dr Wales and Baroness Primarolo are expected to call for more robust parliamentary oversight to preemptively address the potential for invasive practices as seen in Spain, where officials are attempting to classify data usage as an official secret, undermining transparency requirements laid out by the EU AI Act and GDPR.
Existing systems in Spain have reportedly been used against British expatriates, prompting further scrutiny of how such measures could be applied in the UK. An HMRC spokesperson defended the agency’s data collection practices, asserting that they are governed by Parliament and protected by stringent legal oversights, emphasizing that AI helps enhance processes without superseding human decision-making.
The discourse surrounding HMRC’s potential profiling and monitoring practices raises important questions about privacy, accountability, and the ethical dimensions of using advanced technologies in tax collection. The implications of closely watching taxpayer behavior will undoubtedly remain a contentious topic as the UK navigates these developments.
