Tom Blomfield, founder of UK-based digital bank Monzo, has warned that income tax could be replaced within the next five to six years as artificial intelligence reshapes jobs and business models.
Speaking
on The Rest is Money podcast with Robert Peston, Blomfield said governments may shift from taxing human labour to taxing computing power. “I don’t think we’ll tax human labour; we will tax compute—things like data centres—and use that to fund government,” he said.
AI Advancing Faster Than Expected
Blomfield argued that AI systems are already outperforming humans in several specialised tasks, with white-collar roles—such as tax accounting—likely to require significantly fewer workers in the near future.
He noted that current systems, while still limited to narrow applications, are improving rapidly. “These tools are already performing beyond university professor level in some domains. They’re narrow geniuses today, but could become generalisable by the end of 2026,” he said.
To support his view, Blomfield referenced predictions by Dario Amodei and Sam Altman, including the idea that engineers may soon stop writing code—a shift he suggested is already underway.
AI Begins Replacing Routine Work
Concerns around AI-driven job losses are intensifying as companies increasingly integrate automation into workflows.
At Spotify, co-CEO Gustav Söderström said AI is now deeply embedded in engineering processes, with senior developers no longer writing code themselves in recent months.
Meanwhile, job platform Adzuna reported a 35% drop in entry-level job postings since the launch of ChatGPT in November 2022.
Morgan Stanley has also cautioned that the UK could face a disproportionate impact due to its reliance on professional services, which account for roughly 81% of economic output.
Policymakers Eye New Tax Models
OpenAI recently suggested that governments may need to rethink taxation frameworks, shifting towards levies on capital, corporate profits, and AI-driven returns—including the possibility of a “robot tax” on automated labour.
Big Revenue Shift for the UK
Income tax and National Insurance currently contribute about 42% of the UK government’s total revenue, making them its largest funding sources. By contrast, taxes on capital gains, property, and inheritance account for only around 4%.
However, experts caution that implementing taxes on AI infrastructure or digital services could prove politically and practically challenging. Past attempts to tax large US tech firms have faced strong resistance, highlighting the difficulty of regulating fast-evolving digital sectors.
