Software developers using generative AI must ensure tax products are designed with human oversight and only use reliable source data, warns HMRC, but critics say guidance is at least two years too late
With the rush to implement AI tools in tax software, HMRC has issued guidance for developers to ensure they use generative AI (Gen AI) responsibly and transparently.
HMRC said it recognises the opportunities that generative artificial intelligence (AI) offers software developers and ‘encourages innovative use of AI in tax software products’. It is clear that HMRC wants to ensure the use of AI is controlled, has adequate guardrails in place and does not create a wild west for taxpayers, particularly where software is an integral part of tax return process.
With the increasing use of AI embedded in tax software, and the upcoming shift to Making Tax Digital (MTD) for Income Tax from April 2026, accuracy and transparency are vital if taxpayers are going to feel confident about the effectiveness and legality of the AI enhanced products being sold to them.
