AI is something that we cannot escape, as it is built into nearly everything that people use on a day-to-day basis.
A recent study has found that 68 per cent of accounting clients have suggested that AI could replace the need for professional accounting services.
While AI may have its uses, it will never replace the valuable insight that an accountant has on your tax planning and using it could be placing you at risk.
If you are considering using AI for tax advice, there are some things you may want to consider first.
The first thing is that AI regularly makes errors. Chatbots will generate their answers based on patterns, not legal truths.
Their answers can be completely inaccurate, meaning that listening to advice given by a chatbot can leave you in hot water with HMRC if you are applying tax rules incorrectly from advice they have given you.
Tax advice is also complicated and based on individual circumstances. AI can regularly ‘hallucinate’ tax codes, VAT regulations and allowances, leading users to believe that they are eligible for reliefs that they actually aren’t.
Additionally, AI does not have the capacity to create personalised tax plans based on individual circumstances.
AI cannot form new ideas and will only create plans based on information already submitted by somebody else.
Beyond incorrect advice, using AI for tax planning can lead users to a breach of confidentiality.
When businesses or individuals share personal financial information with AI, this may then be shared across servers and can be used for training purposes. This means that your financial information can be made available to millions of people.
There also comes an accountability issue. If you submit a filing to HMRC that is incorrect because of advice that AI has given you, you are solely responsible for the consequences.
AI cannot hold a professional licence. If you end up with a hefty tax bill because of chatbot advice, that is your burden to carry.
If this is a question you need the answer to, you should consider where you got your tax advice from before AI became popular.
Before AI, an accountant was the standard port of call for tax advice. That should still be the case now.
An accountant can help you create personalised tax plans based on your individual circumstances that are HMRC-compliant.
While technology can process numbers, it cannot understand your goals, challenges and circumstances in the way an experienced accountant can.
Our team combines technical expertise with a personalised approach, taking the time to get to know you and your business before offering tailored guidance.
Our team of accountants can support you with your tax planning, financial forecasting, audits and allowances.
Don’t use AI, use us! For accounting support, get in touch with our team today.
Jim Botton – Pleasure Beach (Skegness)
