HMRC ordered to disclose AI use in tax credit applications

Although not a personal data-related news story, the following Financial Times (£) article involves a rejected Freedom of Information (FOI) request which was later upheld by the Information Commissioner's Office (ICO) and ultimately overturned by the first-tier tribunal (FTT) concerning artificial intelligence (AI) usage transparency. 

The case in question involves HM Revenue & Customs (HMRC), which has been ordered to disclose whether it has used AI in its decision-making processes about tax credit applications. The ruling follows a legal challenge by tax expert Tom Elsbury in December 2023, who suspected AI involvement based on the HMRC's rejection letters for research and development (R&D) tax credits. HMRC initially denied Elsbury's FOI request, claiming that revealing such information could assist those attempting to claim tax relief fraudulently. This position was upheld by the ICO last year. However, a recent ruling by the FTT overturned both HMRC's and the ICO's findings, stating that public interest favours disclosure. The FTT determined that HMRC's reluctance to confirm or deny the use of AI contributes to a lack of trust among taxpayers regarding its processes. The FTT noted that Elsbury's arguments were compelling and has set a deadline of September 18 for HMRC to comply with the FOI request. The ICO has confirmed it will not appeal the tribunal's decision.

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