Legislation needed to ensure AI is used safely

The use of artificial intelligence (AI) is to be welcomed where it will lead to improvements in tax administration but practical steps should be taken to make that use legitimate and acceptable as well as to safeguard taxpayers says the Institute for Fiscal Studies’ tax law review committee in a new discussion paper.

The committee notes that HMRC already deploys AI for some of its decision-making – although the exact extent of this is unclear – and that AI will inevitably play a more prominent role in administration over time because it enhances the speed and efficiency of decision-making. But without specific legislation and even a new HMRC AI charter the report warns that taxpayers could be at risk.

Kunal Nathwani committee member and author of the report said: ‘Our current tax law was developed on the assumption that an HMRC officer...